If you are facing divorce in California, the prospect of navigating the property division phase may seem daunting.
Preparation is key since you and your spouse need to work out an equal net share. What does this mean?
Dividing assets and debts
The state of California is a community property state, which means that in a divorce, you and your soon-to-be-ex should divide your marital assets and debts equally. However, this does not necessarily mean a 50-50 split. The two of you can prepare for property division ahead of time if you can agree on a separation that you both feel is fair.
Reaching an equal net share
An example of fairness is balancing out an asset of substantial value, such as the marital home. If one of you takes the home during property division, the other party can equalize this by taking several assets that add up to a similar value. You apply the same principle to dividing debt. In short, you want to create an equal net share. This refers to adding the worth of all your assets, then subtracting the amount of debt you have. The remainder is the net value of your community estate that you and the other party will divide.
Some assets are more complicated than others to divide, such as a pension. This may be one of your most valuable assets and division must adhere to special rules. In the case of a pension, the court will issue a qualified domestic relations order, or QDRO, to establish division. Both the benefits provider and the judge must approve the QDRO, and you will want legal guidance to ensure there are no missteps. Like other assets, the pension will be part of determining the equal net share in the property division phase of your divorce.