Many couples in Sacramento who are going through a divorce attempt to divide their property without consulting a lawyer, an accountant or a financial planner. Such efforts can resolve a number of major issues in the divorce without the interference of the courts or opposing attorneys. The do-it-yourself property division process, however, has a number of pitfalls for the unwary.
First, anyone attempting to negotiate a property settlement with their soon-to-be former spouse must understand the mechanics of California’s community property law. Any property acquired during the marriage is deemed to be community property and must be divided equally. Any property that was owned by one spouse prior to the marriage is personal property and need not be divided.
Community debts must also be divided, and credit cards can pose a special problem, especially cards that are in the name of only one spouse. The credit card company is not obligated to accept the spouses’ agreement about how the card balance is to be paid, and if the non-signatory spouse assumes responsibility for paying the balance and then defaults, the credit card company can pursue the original card holder. Some spouses attempt to hide assets from the other spouse. A careful review of the other spouse’s schedule of assets and debts is often necessary to uncover attempts to hide assets. Moreover, hiding assets is a very bad idea because the hidden assets usually come to light sooner or later, creating harmful consequences for the spouse who attempted to hide them. Non-residential real estate can pose problems in valuation and division. An experienced real estate appraiser is often necessary to resolve such issues.
Once a couple has agreed upon the terms of their property division, that agreement should be merged into the court’s judgement of divorce. Doing so simplifies enforcement of the agreement if the other spouse departs from its terms. For couples with significant assets, regardless of whether they are community or personal property, reviewing the property settlement agreement with an attorney may prevent problems with interpretation and inadvertent consequences.
