Divorce can be one of the most challenging transitions in life, not just emotionally, but also financially. Beyond the emotional stress, a major concern many people have is how to protect their hard-earned assets. If you are about to get a divorce in California, you may be wondering, “Will I end up losing my hard-earned assets?” Or perhaps, you are wondering what will happen to your business, retirement savings, or home.
At Okwuosa Pulliam Law Group, we understand the stress that this uncertainty can cause. We understand why it is so crucial for you to protect what you have worked hard for. Fortunately, with the right preparation and legal guidance, you can protect your assets during your divorce, ensure a fair outcome, and thus protect your financial future.
Understanding Community Property Laws in California
California is a community property state. In such a state, most of the property and debt acquired during the marriage is considered to be equally owned by the spouses. This means that when a couple gets a divorce, their marital assets are typically split 50/50. Marital assets can include real estate, vehicles, investments, and even retirement accounts.
It is vital to note that dividing assets 50/50 does not necessarily mean that every asset is split in half. There are several ways to achieve an equal split, including one spouse retaining one asset while the other receives other assets of equal value.
However, while California law generally requires community property to be divided equally, property division in a California divorce is not always 50/50. First, a judge may order an uneven split in some cases. Second, the spouses can agree on a different division through negotiation or mediation, and the judge will typically approve it. Third, a pre- or post-nuptial agreement can specify a different division of assets.
So, what about separate property? Separate property, which is property that one spouse brought with them into the marriage, any inheritances or gifts received by one spouse, and anything acquired after the legal separation date, is not subject to division during a California divorce.
Common Challenges in Protecting Assets
Couples face several challenges that make protecting assets during the divorce process particularly tricky. You might assume that if yours is an amicable divorce, you will not face any problems. This is not true. Even in an amicable divorce, fairly splitting assets can be a challenge.
Here are some of the common challenges people face;
- Commingled Property: Commingling happens when separate assets are mixed with community assets.
- Hidden Assets: Sometimes, spouses hide assets to avoid sharing them during divorce.
- Complex Assets: Determining how to divide complex assets such as business shares, stock options, pensions, or retirement accounts can be difficult. Often, dividing these requires expert valuation and careful planning to ensure each spouse receives a fair share.
However, while you could face several challenges, it is possible to protect your assets during a California divorce. We discuss this in the next section.
Steps You Can Take To Protect Your Assets
Below are some of the proactive steps you can take to protect your assets during a California divorce;
- Collect and Organize Financial Documents
The first step toward protecting your assets during divorce is gathering and preserving your financial documents. Some of the documents to gather include;
- Tax returns
- Business records
- Pay stubs
- Bank and credit statements
- Retirement account statements
- Property deeds
- Mortgage documents
- Identify Community and Separate Assets
One of the most vital steps to take is to know which assets are community and which are separate. That way, you can prevent separate property from being divided between you and your spouse. If you entered the marriage with property, such as a vehicle, real estate, or a bank account, ensure you gather proof showing that the asset belongs to you alone.
- Don’t Commingle Funds
After separating from your spouse, do not mix your individual funds with joint funds. Open a separate bank account and track all transactions. This will make it easy to differentiate what is truly yours.
- Keep an Eye Out for Suspicious Behavior
As we mentioned earlier, some spouses attempt to conceal assets during the divorce process. During the divorce process, keep an eye out. Watch out for any suspicious bank withdrawals and asset transfers. If you notice any suspicious behavior, inform your lawyer immediately.
- Consider Alternative Dispute Resolution
Litigation is not always the best route, especially if you want to have control over the outcome of your case. In divorce court, the judge will have the final say. Alternative dispute resolution methods, just like mediation and collaborative divorce, can allow you to negotiate asset division in a way that works for you and your spouse. ADR can lead to better financial outcomes.
Avoid Costly Mistakes
During a divorce, emotions can run high. It is easy to make decisions that can hurt your financial future. Here are some of the common mistakes to avoid;
- Reaching an agreement too quickly
- Not conducting a full financial audit
- Hiding assets
- Letting your emotions drive your decisions
- Ignoring tax implications
- Attempting to go without legal representation
The Importance of Legal Help
Even if yours is an amicable divorce, asset division can be tricky, especially under community property laws. A skilled divorce attorney can ensure your rights are protected.
An experienced California divorce attorney can help you identify and value assets, trace separate property, uncover hidden assets, and negotiate fair settlements that are in your best interests. A skilled lawyer can also anticipate potential issues and guide you through mediation or court proceedings (if necessary).
Protecting your assets during divorce is absolutely achievable with the right approach. By understanding how California’s property division laws work and taking proactive steps, you can prevent costly mistakes and protect your financial future. Every situation is different, and the best thing you can do is carefully plan and hire an attorney. At Okwuosa Pulliam Law Group, we are committed to helping Californians protect what they have worked hard to build. Our experienced Los Angeles divorce attorney can guide you through every step of the process. From identifying and valuing assets to help you settle your claims, we will be there with you. Contact us today to schedule a consultation and learn more about how we can help.
