During a marriage, couples can accumulate a lot of things, from useful kitchen appliances and linens received as wedding gifts to an expensive watch given as an anniversary present to your vehicles and home. One of the first questions when divorce arises is regarding separation of property: What do I get to keep?
It’s not selfish – it’s natural to want to understand your financial standing as you move forward in the next phase of your life. Will you need to find a new place to live? Must you buy all new furniture?
Every divorce settlement is unique. What you keep will depend on what you want, what you need, and what you and your spouse can agree to split. You may even choose to sell many items to split the proceeds or pay off debts. There are also legal rules for negotiating the separation of property.
Let’s walk through steps you can take to assess what you want and need to keep, and what the law says.
What do you want?
It’s best to walk into your first divorce mediation session with a list of your communal property. Note which items feel non-negotiable to keep (though there will be some negotiation), which items are just “wants,” and which items you will happily concede to your spouse.
For example, if your parents gave you and your spouse the family china as a wedding gift, it may feel like you have a right to keep that china. Communal property laws in California say otherwise (more on that later). But you can use this list to consider what you are willing to “give” your spouse so they are more willing to “give” you the items you can’t bear to part with. You love the china and want to keep it in your family, so perhaps you are willing to let the TV and game systems go.
As you make this list, calculate the value of each item as accurately as possible. Track down receipts and credit card statements and assess the value of vehicles using online tools. Have high-value items like artwork, jewelry, property, and business assets appraised by professionals.
Before deciding to sell property to split the earnings, consider the tax implications.
What do you need?
Often, two of the most contentious questions in a divorce are who gets primary custody (if a 50/50 split is unfeasible) and who keeps the house. These questions usually go hand in hand so that children do not have to be uprooted. Make sure you list the items you feel you need to make the custody agreement work best for your children.
Many couples also have unequal income, such as stay-at-home parents or when one person works while the other finishes a professional degree with the promise of a high income. In these cases, there is often a catch-up period, where someone returns to school to earn a degree or certification or is awarded spousal support as they work to increase their earnings. When considering support, it may make sense to sell higher-value items, like recreational vehicles, vacation homes, or jewelry, to help provide more funds with which to create an equitable property split.
What does the law say?
Regardless of what you want or even need, the laws of your state will decide what happens when there is disagreement. An experienced mediator will make sure you are informed about applicable laws so that you can make informed decisions about what you believe is fair. California is a community property state, so any assets, wages, or debts acquired during the marriage belong to both of you equally. This doesn’t mean you must sell every item you own so you can equally split their worth. Rather, it means that while each spouse has the right to 50 percent of your property, you both can negotiate what feels fair to you.
For example, your car may be worth $20,000, while your spouse’s truck is worth $30,000. Since you both like your vehicles, you each prefer to just keep them. But are you losing out on $5,000 of value if they keep their truck? Technically, yes. But you know your spouse needs the truck for work and they said you can have the dishes and kitchen appliances. This feels fair to you.
Conceding some value here and there, while taking each others’ feelings and needs into account, can help both of you feel satisfied with the final agreement. When spouses nickel and dime one another during divorces out of pettiness, cruelty, hurt feelings, or anger, it can drag out the procedures and even land you in court, where attorneys’ fees may end up costing far more than the property you were fighting over.
There are some exceptions to community property, which include separate property owned prior to the marriage, gifts, and inheritance – and the money earned from those things, such as rent from an inherited condo. These exceptions can get complicated easily, especially when funds from separate and community property were commingled, such as using earnings from a pre-marriage rental property plus both of your wages to purchase a new home. Track these items as best as you can and work with your experienced divorce mediator to help you sort out how to fairly deal with this complexity.
As you can see, the complexity of figuring out what you get to keep often depends on what you have. Join us for a free consultation today so we can help you reduce the stress and potential arguments that come with splitting property in your divorce.