At some point during your divorce in California, you’ll have to decide what to do about property division. If you have a considerable amount of assets, then you might have to worry about property division in what is considered a high asset divorce, also called a high net worth divorce. While the rules of property division don’t technically change based on the assets to divide, there will be much more to think about and decide – and possibly fight over – if your divorce has a high net worth, so it’s worth taking a closer look at the entire process.
What are Highly Valuable Assets?
Everything you own might seem like a “highly valuable asset” to you because it’s yours. After all, you earned or purchased something because you wanted it, so it must seem very valuable to it in some way. When considering a high net worth divorce, though, objectively valuable assets will come into question.
You might be on track for a high net worth divorce if you and your spouse own or share:
- High-value savings accounts
- Family-owned business
- Investment or retirement accounts
- Real estate
- Multiple family vehicles
- Rare jewelry or heirlooms
- Stocks or company shares
- Valuable electronics, appliances, etc.
California Rules for Community Property Division
In California, each spouse has a 50% interest in any asset that is considered community property (called marital property in some contexts and other states). The law defines community property as anything that you or your spouse earned or obtained while you were married. In other words, you and your spouse each have the same level of ownership over each piece of community property.
Did you purchase a house with your spouse while you were married? Even if you have technically paid for most of the home out of your income and earnings, it will still be considered a type of community property, for example, which would mean your spouse has a 50% interest in it.
Net Value of Assets Must Be 50-50
Importantly, the net value of community assets in a California divorce must be divided 50-50, which does not necessarily mean that the actual assets must be divided as such. For example, no court is going to say that your house needs to be split down the middle. The court also won’t say that if you get 100 pieces of property total, your spouse must also get 100 pieces of property. Instead, when dividing high-value assets in a divorce, the focus will be on the overall value after it has been fairly appraised.
Consider this scenario: You and your spouse bought a home and sports car together while married. You also own and operate a small business together. A business valuation determines the business is worth, in summary, $500,000 overall. An appraisal of the family home and the sports car determines their combined values are $500,000. If you were to enter a high net worth divorce, one solution could be to give the house and car to whichever spouse does not retain ownership over the business because that would create an equal division of the assets based on value (not type or number).
Proving Who Should Get What Property
The moment you think you’re facing a high net worth divorce, you should talk to a divorce attorney. With a lawyer’s help, you can collect information about your valuable community property and what property you believe is separate property (owned only by you), so you can present an agreement to your spouse with confidence. Your attorney will also be ready to represent you in court or mediation sessions if necessary.
Information sources that can help an attorney understand your situation and prepare your case include the following and more:
- Real estate and business appraisals
- Financial statements
- Bank statements and account records
- Business contracts
- Leases and mortgages
- Investment management histories
The goal is to decide what community property you want to fight for, and what pieces you would be willing to “give” to your spouse. With these documents and records, you can get a better understanding of your important asset’s total value and how that will factor into your divorce.
Have questions about how to approach a high net worth divorce? If you live in Orange County, CA, count on Gill Law Group, PC for all the legal guidance and insight you need to get your case moving forward and to look for ways to protect your most important assets. As one of the region’s most trusted family law firms, we’ve handled complex and high value divorce cases for decades of collective experience—let us work on your case, too!
Schedule a complimentary consultation by dialing (949) 681-9952 today.