property division Archives - Lonich Patton Ehrlich Policastri

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How is Property Divided in a Divorce?

January 13, 2021/in Family Law /by Virginia Lively

Going through a divorce is devastating, and the headache of trying to understand the intricacies of divorce law and how it applies to your specific circumstances can be a nightmare. If you find yourself wondering, “How is property divided in a divorce?” then you are not alone.

The first piece of advice for people facing a divorce settlement is to research your specific state law or reach out to an asset division lawyer who can help you understand how family law property division is settled in your state.

How is Property Divided in a Divorce in California

The state of California practices the principle of “community property” during divorce proceedings. This means that all property accumulated by the spouses during the marriage is considered community property, and thus must be divided relatively equally between the spouses.

While some spouses are able to negotiate the division of property without the help of an asset division lawyer, property divisions are not considered legal without the approval of a judge who needs to validate the legality of the final separation agreement.

Unfortunately, divorce can bring forth hostility even after previously happy marriages. Often couples find that they cannot agree on how to separate their assets, and require the help of lawyers who specialize in family law property division. Both sides will present their case, and a judge will determine a division of property that is fair and relatively equitable. Cases in which the spouses have children together, tend to further complicate the divorce as determining a child custody arrangement can be a contentious issue.

Joint Property Versus Separate Property

During divorce litigation, a judge will need to determine which assets are joint property (community property) and which property is considered separate. Separate property includes:

Property that either spouse possessed before the marriage
Inheritances or gifts that either spouse was granted both prior to or during the marriage
Possessions that were acquired after the sale of personal property as mentioned above
Interest, dividends, or earnings on separate property
Property that was acquired by either spouse during the period between the official separation of the spouses and their finalized divorce

Shared property may become joint property if both spouses share payments on the property, as in a house, or if both spouses contribute to the worth of a property, as in a bank account. Nuances like these make an asset division lawyer highly recommended in high-asset divorce proceedings.

After asking how is property divided in a divorce, a couple signs corresponding documents that will divide their property.

Determining the Value of Property

Once the shared and joint property are differentiated, the division property process begins. Joint property is not always physically split down the middle but is often awarded as whole parts. For example, while one spouse may be able to keep the more expensive car, the other may be granted the higher checking account or an equalization payment.

Debt Ownership

Community debt is a complex issue beyond the sample of this blog, however, it is highly advised to assign debts to one spouse instead of sharing the ownership of the debt. This is to prevent one person’s credit from being negatively affected if the other is unable to make payments. Divorce litigators often offset an imbalance of property division by granting the debt ownership to the spouse who was granted more personal property. While one spouse may receive the higher checking account that same spouse may also have to assume the sole responsibility of paying off the credit card debt.

Family Law Property Division in San Jose

If you are facing a contentious divorce, it is vital to invest in an asset division lawyer to help you protect your personal property and ensure that you are not being taken advantage of. LPEP is a reputable high-asset family law firm that specializes in representing high-net-worth individuals. Schedule a 30-minute consultation today so that you may understand how we can help you. To learn more about property division, read this.

10 Common Divorce Questions

September 6, 2019/in Family Law /by Gretchen Boger

Divorce is very nuanced. There are many things to consider which can make an already difficult situation more challenging. Lonich Patton Ehlich Policastri has put together a comprehensive guide of the most commonly asked questions. Get an answer to your divorce question now.

1.What Is The Difference Between Divorce Mediation And Divorce Collaboration?

Mediation is when a neutral third party is hired to facilitate resolution of issues between two people during a divorce. The mediator helps with paperwork, mutual communication between all parties, and securing 60%-70% of goals or desires are met for each party.

Collaboration is a binding contract between both parties and their attorneys stating neither will go to court. If this contract is breached, the parties will have to fire their attorneys and start the process over. Attorneys can help clients identify what’s important to them and how to work through issues. It is common to have non lawyer professionals involved in collaborative divorce. Mental health professionals, divorce coaches and financial specials can add clarity to emotions and difficulties that arise during the resolution of a marriage.

2. How Much Does It Cost To Get Divorced?

This is probably the most common divorce question. The answer is different for everyone. It depends on what issues you have. Do you have children? If so, you will need to deal with the issue of custody. How will your property be divided? Do you own a business together? What if one of you needs spousal support? Is there a post nuptial or a prenuptial agreement? All of these factors impact the cost of your divorce. The best way to find out what cost you’re looking at is to call an attorney. If you live in San Jose, Lonich Patton Ehrlich Policastri offers a free 30 minute consultation that can answer tough questions like this.

3. How Long Will A Divorce Take?

The answer for this divorce question is similar to the question above. It depends on your unique situation. The attorney you work with will need to know of any estate plans, businesses or property you and your spouse own. They will also need to consider any children and custody agreements involved. It depends on how much you and your spouse agree upon. If you go through mediation or collaboration, it could take less time than going through litigation.

4. How Is Property Divided In A Divorce?

In California, this comes down to two rules: Community property and Separate property. Separate property is anything you acquired before your marriage and that hasn’t been commingled or shared between the two parties during the marriage. If you owned a house before your marriage and have kept it separate from community property, that is added to your separate income when division begins.

An attorney answers the burning divorce question of how property is divided after divorce.

Community property is anything acquired during the marriage or shared during the marriage. This includes a family home, cars, debts or anything earned or gifted during the marriage. Community property is divided during the dissolution of the marriage. This doesn’t mean it is necessarily divided in half. If you have two assets of equal value, one person may receive one while the other party receives the other; an example being a house and a retirement savings plan.

5. What Are My Rights During A Divorce?

You have rights protected under the Bill of Rights. You have the right to a fair trial; the right to a safe trial free of harassment from a spouse or their attorney. You have the right to see your child unless a court states otherwise. Speaking with an experienced attorney such as the ones at Lonich Patton Ehrlich Policastri is the best way to learn about your rights during your divorce. Get your questions answered in a free 30 minute consultation.

6. How Does The Court Decide On Child Custody During A Divorce?

Child custody is decided based on many factors. Often, during the case, temporary custody is assigned. This allows the child to have a stable routine they can depend upon and prevents their lives from being upended. Judges can be hesitant to change this plan when deciding on permanent custody as they don’t want to remove that stability from the child’s life. Temporary custody can be an indicator of the end result of child custody, but it isn’t guaranteed. Once divorce is filed, the state your child currently resides in becomes their home state. If a parent wants to move out of the state or relocate, this can affect the outcome as well.

Judges consider the wellbeing of the child over everything else. This means they will look into any history of mental illness, drug abuse or addiction, and financial stability (to name a few). Courts tend to favor the spouse who is able to put their differences and issues from the divorce aside for the betterment of the child. This means the more level headed you are, the better.

7. Does My State Have A Separation Requirement?

This is a crucial divorce question to research before filing. In San Jose, CA, there is no separation requirement. You must have lived in CA for 6 months before filing for divorce however. Once you have filed, you must wait another 6 months before the finalization of your divorce. If you file for legal separation in the state of California, there is no waiting period making it a great option for those who haven’t lived in the state for 6 months.

If you don’t know if your state has a separation requirement, the best way to find out is to research your state laws or contact a local divorce attorney.

8. How Do I File For Divorce?

This is another common divorce question clients ask. To be eligible for a divorce in CA, you must have lived in the state for 6 months. When it comes to counties, you must have lived in the specific county you file in for 3 months.

Before no fault divorce existed, a spouse had to provide a reason for the dissolution of marriage. This typically involves extramarital affairs or domestic violence and the practice is still common in some states. In California, all divorces are no fault which means one party can simply want a divorce from the other without providing a “fault.” This means that wrongdoing has no impact on the division of assets according to the judge.

After filing, there’s a 6 month waiting period for the finalization of divorce. You and your spouse can work collaboratively to make a plan for child custody and property division without legal assistance and if that doesn’t work you can seek help from a mediator. This is where you might consider collaborative divorce or mediation. The last option is divorce litigation which is also the messiest. This should be a last option if you and your spouse cannot agree on anything.

For help filing in Santa Clara county, contact Lonich Patton Ehrlich Policastri.

9. Will I Have To Go To Court?

You may not need to go to court if you are able to resolve issues and division of assets through mediation or collaboration. This is an ideal situation and all papers can be filed with the court with a judgement on your case sent in the mail. Sometimes you may still be required to show up for a hearing in these cases.

Proper divorce planning and mediation can help you avoid going to court.

If you opt for divorce litigation, the matter will be handled in court and this can be pricey. If you can avoid litigation, it’s in the best interest of everyone involved. However, at LPEP Law, they know how contentious divorces can get and understand not everyone will be able to settle their issues out of court.

10. How Do I Decide On A Divorce Lawyer?

You should make sure your divorce attorney specializes in family law and divorce cases. You want someone who has handled a myriad of divorce situations and will work to get you the best possible outcome.

Ask how many years of experience they have. If you’re going to court, do they know the court and the judges who preside there? Are they board certified? These are all important questions to ask when deciding on a lawyer.

If you’re considering divorce in San Jose, contact Lonich Patton Ehrlich Policastri for a free 30 minute consultation. They can help you decide if mediation, collaboration or litigation is the right option for you. Get any divorce question you have answered.

How Is Property Divided After Divorce?

September 6, 2019/in Family Law /by Lonich Patton Ehrlich Policastri

Financial issues following a separation can be complicated. Proper divorce planning and record-keeping can be invaluable to a smooth divorce proceeding. Determining what is community property and what is separate personal property can become complicated very easily. For example, you may ask “What happens to my house after divorce?”

Seemingly simple issues such as who stays in the community home and who pays the mortgage after separation carry significant weight. To assist in these issues, Epstein Credits and Watts Charges are used.

Epstein Credits And Community Property

In 1979, the case Marriage of Epstein gave the court the power to order Epstein Credits. Epstein Credits are used to determine the amount one spouse will be reimbursed for debts paid after separation but before trial. Epstein Credits allow a spouse who pays community expenses or debt after separation to be reimbursed for their one-half share of the expense or debt. An example of this is a mortgage on a community property home. This does not apply to separate personal property.

An attorney signs paperwork dividing community property in a divorce

When requesting Epstein Credits, it is important to keep accurate records. Records should include the expenses or debts made and from what sources the expenses or debts were paid from. The more extensive the records kept, the easier it will be to determine what reimbursement may be made from Epstein Credits. Proper divorce planning can assure you have all the records you need to proceed with this process. Further it is important to raise the issue of Epstein Credits as early as possible. This helps to avoid extra complexity at trial.

Watts Charges And Community Property

The case Marriage of Watts in 1985 introduced the concept of Watts Charges, allowing a spouse to charge the other spouse for the use of a community asset after separation. While Watts Charges can apply to almost any community asset, a common situation that arises after separation is that one spouse will remain in the community owned home exclusively. When one spouse remains in the community home the other spouse may charge that spouse one-half of the community home’s fair monthly rental value.

Courts prefer that prior written notice of the intent to seek Watts Charges be given. This notice simplifies issues at trial. It makes it known that Watts Charges are within the reasonable expectations of the spouses. Like Epstein Credits, the earlier that a claim for Watts Charges are raised the better. The claim will be retroactive to when written notice was given.

Epstein and Watts Together

In some circumstances, Epstein Credits and Watts Charges may partially or even completely offset each other. If a spouse is both living in the community home and paying the mortgage, if the mortgage payment is equal to the value of the monthly rent, the two will offset each other. If however if the value of the rent is higher than the mortgage payment, the difference in value will still be owed to the respective spouse. It is also possible to owe both Epstein Credits and Watts Charges. Consider if a spouse is living in the community home, and the other spouse is paying the mortgage for the property. In this case, the spouse living in the home may owe both the one-half rent and the one-half payment of the mortgage.

An experienced attorney sitting with a client helping to divide up community property in a divorce.

Regardless of the circumstances surrounding separation and community property, these financial issues are complex. They are best addressed by a knowledgeable and experienced attorney. If you are separated or looking at a high net worth divorce, please contact one of the experienced attorneys at Lonich, Patton, Ehrlich, Policastri. They offer a 30 minute free consultation where they can assist you with divorce planning and answer any questions you may have.

Please remember that each individual situation is unique, and results discussed in this post are not a guarantee of future results. While this post may detail general legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

California Divorce: What is a Moore Marsden Analysis?

March 14, 2019/1 Comment/in Family Law /by Michael Lonich

Who or What are Moore and Marsden?

Moore and Marsden are two cases decided by the California Supreme Court and the California Appellate Court in 1980 and 1982 respectively. These cases dealt with the issue of how to determine the community property interest in a house.

Generally, a house purchased before marriage will be treated as the purchaser’s separate property. However, during marriage if the mortgage is paid with community funds a portion of the value of the house may become community property. Because California is a community property state, this means all community property is divided equally in a divorce.

When do I Use a Moore Marsden analysis?

The decisions of the Moore and Marsden cases are the basis for what is called the Moore Marsden analysis. The Moore Marsden analysis applies a formula to determine what portion of a house is community property due to mortgage payments made during marriage with community funds.

To apply the Moore Marsden analysis, you need to have two key factors. First, any mortgage payments made must be made with community funds. Second, these payments must include payment of the loan principal and not only interest.

How do I Apply a Moore Marsden Calculation?

If you meet the above two factors, you must compare the market value of your home at the time of your marriage and the market value at them time of your divorce proceedings to calculate the amount the house has increased in value during the marriage.

You then compare the amount principal paid during the marriage to the total purchase price of the house to calculate what percentage of the purchase price was paid during the marriage.

Next you take the percentage of the purchase price that was paid by the community and compare that to the amount your house has increased in value during marriage and add to it the amount of the principal paid by the community to calculate the total amount of the house that the community is entitled to.

Finally, in a divorce this amount is divided between the spouses because it is community property.

For example, if your house was worth $100,000 at the time of marriage and $200.000 at the time of divorce, then the house has increased in value by $100,000.

If you purchased the house for $50.000 and during your marriage paid off $10,000 of principal with community funds, then 20% was paid by the community.

Using the above examples, you take the percentage paid by the community, 20%, of the amount your house increased in value, $100,000, and add the amount of principal paid during the marriage, $10,000, which equals $30,000. This means that the community would be entitled to $30,000 of the $200,000 house.

This would mean that in the above example, each spouse would be entitled to $15,000 as community property is divided equally. The remainder of the house value and the balance due on the loan is kept by the spouse that purchased the house with separate funds before the marriage.

Is There Anything Else I Should be Aware of?

In a typical divorce, there are many additional factors that may be involved in the calculation. Refinancing and home improvements made with community funds both influence the calculation. Further, it may simply be difficult to agree on the required values of the home with your spouse.

Because of the complex nature of the Moore Marsden analysis, it is important to discuss your circumstances with a knowledgeable expert. If you own a home and are considering divorce, please contact one of the experienced attorneys at Lonich Patton Ehrlich Policastri.

Educational Debt: Be Smart at Divorce

June 24, 2013/in Family Law /by David Patton

Upon divorce, many people find that they are still saddled with substantial educational debt. So, where does that debt go? It depends. California is a community property state. When a couple divorces, each spouse receives fifty percent of all assets earned during the marriage. Similarly, a couple must split whatever debts they have acquired during the marriage. (For example, if you owe $10,000 on a particular credit card, each spouse is responsible for $5,000 of that debt or a debt of equal value.) Simple enough, right?

Not always. The allocation of educational debt at divorce can look much different. “A loan incurred during marriage for the education or training of [one spouse] shall not be included among the liabilities of the community for the purpose of division….but shall be assigned for payment by the [student spouse].”*

It is sometimes said that “the debt follows the debtor” in this situation. Usually, the student-spouse will keep the loan taken out for his or her education. Take, for example, the situation where a husband takes out a loan (in his name) to pay for his wife’s nursing credential. There, it is likely that the wife will be solely responsible for paying off that debt after dissolution, not her husband. (So, if you and your spouse have no debt except for your spouse’s student loans, you may be able to walk away from the marriage debt-free!)

On the other hand, however, the distribution could be much more complicated. Educational loans come into play in several ways upon divorce depending on when the loan was taken out and whether payments were made during marriage. Here are some scenarios you could face:

If your student-spouse took out an educational loan during your marriage and your combined earnings were used to repay that loan, you might be a candidate for reimbursement. In this situation, you could potentially receive half of whatever was paid for the student-spouse’s educational costs (e.g., tuition, books, transportation, supplies).
On the other hand, if your student-spouse took out an educational loan during your marriage and your combined earnings were used to fully repay that loan, you may not be able to recover all of those expenses. If the student-spouse can show that the community (you, your spouse, and the property acquired by you and your spouse during marriage) substantially benefitted from the educational loan, the community may not receive a reimbursement .
- For example, if you put your husband through medical school but have been enjoying a high standard of living due to his increased earning capacity, you may be out of luck as the non-student spouse. Nevertheless, every situation is unique, and depending on the specific circumstances of your case, reimbursement could still be on the table and it is worthwhile to investigate fully.
If the student-spouse took out the loan before the marriage, the debt incurred is probably the student-spouse’s separate property obligation, meaning that you will not be liable for repayment of that loan.**
If both spouses went to school during marriage, there could be a reduced right to reimbursement or offset of the resulting debt.
Additionally, the likelihood of reimbursement could be reduced for a non-student spouse if the education or training funded by that spouse enables the student-spouse to engage in gainful employment that substantially reduces the student-spouses need for financial support.
- In the long run, keeping spousal support payments in mind, eating the educational debt could be best alternative when compared with financially supporting your ex for many years to come (or indefinitely).

There are several different ways the educational-loan story can pan out. Similar to other areas of family law, the outcome really depends on the facts of that case.

Needless to say, educational debt problems can be complicated under California law, and you may need legal assistance to ensure that debt distribution is fair at divorce. Contact the certified Family Law Specialists (as certified by The State Bar of California Board of Legal Specialization) at Lonich Patton Erlich Policastri to learn more about handling educational debt at divorce. Our attorneys have decades of experience handling complex family law matters.

Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

*Quoting California Family Code §2641.

**See California Family Code §2627.

Retirement Benefits: I Earned Them So They Are Mine, Right?

February 7, 2013/in Family Law /by Gretchen Boger

When parties consider divorce or separation they are rightfully concerned about their property. For example, parties may contemplate who will get the house, the dog, the cars, or even the family’s prized Dyson vacuum cleaner. But what about retirement benefits? They don’t typically rank at the top of the “coveted marital property” list, but maybe they should. If you have worked for an organization for most of your adult life, you and your spouse may be entitled to substantial benefits.

Under the California Family Code, retirement benefits are divisible community property assets and will be affected by divorce, legal separation, or termination of domestic partnership. Even if the party that earned the benefits has not yet retired and has no immediate plans to retire, all retirement benefits accrued during a marriage or domestic partnership are fair game when the parties decide to part ways. In fact, the non-earning spouse is generally entitled to fifty percent of any retirement assets accumulated during the marriage.

Division of retirement benefits can be complicated and may implicate complex tax issues. The Lonich Patton Erlich Policastri team, which includes several certified Family Law Specialists who are certified by the State Bar of California Board of Legal Specialization, offer decades of experience handling complex family law matters. If you are contemplating divorce, legal separation, or termination of a domestic partnership or have been served in an action for divorce, legal separation, or termination of a domestic partnership, please contact Lonich Patton Erlich Policastri for further information.

Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may detail general legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.