If you and your spouse have acquired a significant amount of real estate during your marriage, your divorce may be a high-asset one and subject to stricter property division guidelines. At Butler, Thiessen & Metzinger, Inc., we represent clients in high-asset divorce cases throughout the Central Valley in California. We possess a thorough understanding of California’s community property laws, which we use to help clients obtain the fairest possible settlement in their high net worth divorces.
According to SF Gate, California is one of nine community property states in the nation. What this means is that, unlike in an equitable distribution state, a judge will split your assets and liabilities 50/50, regardless of who purchased an asset or if one spouse did not work. The theory behind this concept is that both spouses contributed to the marriage in some way, even if not monetarily.
If you and your spouse own real estate, the property distribution process is much more complex than deciding who gets the family home and who gets the vacation home. To ensure equality across the board, the judge will require you to do several things. The first is to obtain an appraisal of each piece of real estate from a certified appraiser. If equity and/or mortgage exists on a property, calculate 50 percent of each. The resulting amount represents the hypothetical share owed to each spouse.
If you and your spouse decide to sell, the process becomes exponentially easier. Once a property sells, you would pay the outstanding mortgage and divide the proceeds 50/50. If one party keeps a property, the judge will address any monetary imbalance and may award you or your spouse an additional asset or debt to offset the discrepancy in value.
There are exceptions to community property distribution laws. For instance, if you or your spouse inherits a piece of real estate or receives it as a gift, the property becomes exempt from community property division. More information regarding high net worth divorce proceedings is available on our web page.