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The Division of Assets and Debt in a Divorce

Getting a divorce is a tiring and frustrating process for many. Not to mention, most disagreements during the process happen the most while dividing up assets and debt. So how does one navigate this? The first step is to understand what exactly can and cannot be divided. In this month’s blog, we discuss the differences between community property and separate property and how this affects the split in assets. 

Community Property vs. Separate Property

Depending on the state, there may be different property division laws when it comes to divorce. Here in California, the community property standard is used to determine what assets are divided between spouses. These are generally things that domestic partners own together and have purchased during the course of their marriage as well as any earnings and debt. However, this does not include any gifts or inheritances.

For example, you may be wondering who gets the car. If the car was purchased using money earned during your marriage, then it belongs to both you and your spouse even if you solely paid for it. This is because the savings you used to purchase the vehicle was earned while you were married and is now considered community property. This also applies to any accumulated debt or financial obligations even if it was incurred by one person only.

Basically, community property and community debt are divided evenly between partners. However, this does not necessarily mean that it’s always divided 50/50. Certain situations can bypass this ruling such as a prenuptial or postnuptial agreement that explicitly states certain assets or property remain separate in the event of a divorce. Spouses can also agree on different plans for splitting and alimony.

On the other hand, separate property is anything an individual owned before they were married. This includes inheritances, gifts, rents, profits, and any income they earned before joining in matrimony.

For example, if you had instead purchased a car using money you inherited from a relative, then that car belongs to you even if it was purchased during your marriage. This is because you were using money that is considered separate property.

In addition, separate property is also anything you acquire or earn after getting divorced. The date of separation is important because it can determine the difference between community property and separate property.

Agreeing on What to Divide

Trying to divide up the property between you and your spouse can get very tricky. There will most likely be some disagreements, especially if it’s a contested divorce. In this case, hiring a lawyer is your best option for a mediation. However, if you both decide to divide it up yourselves, here are some steps to take:

  1. Make a list of everything valuable.
  2. Determine which items or belongings are community property or separate property.
  3. Agree on the fair market value of each property.
  4. Get the judge’s approval.

Overall, it’s still best to go over your community property with a lawyer in order to keep things organized and fair. In this stage, being transparent and honest is extremely important and you should not try to keep anything hidden. Otherwise it will lead to even more conflict down the road and you may even face penalties.

Get Legal Support

It usually gets very confusing trying to determine what belongs to who, especially if you’re uncertain about the source of money. That’s why you should put your trust in Family Law Richard E. Young & Associates. With decades of experience, we will provide the necessary guidance and support to make your divorce hassle free. We will work hard to get the best possible results. Visit our website to learn more and schedule an expert consultation to address any questions or concerns.

Alimony Explained

Alimony, also commonly known as spousal support, is a form of financial support paid by one ex-spouse to the other after the marriage has legally ended. Alimony is enforced by federal law and is in place to acknowledge that in marriages where a spouse forfeits a career to manage the household, the couple is essentially splitting essential family duties based on nonmonetary contributions that have to be equally considered. To learn more about the ins and outs of alimony, continue reading our blog!

Who Qualifies for Alimony?

The whole objective of alimony is to provide “reasonable and necessary” support upon divorce or separation. In order to qualify for alimony one must show the court that he or she needs financial support and that the other spouse has the economic means necessary to provide it.

What are the Stipulations of Alimony?

  • It must be requested during the divorce, not after
  • It will have to be forfeited in the event of remarriage and at the request of the ex-spouse
  • Couples who agree on alimony terms can resolve this matter outside of the court, however alimony can only be legally enforced when ordered by a court or if there’s a written agreement
  • Failure to pay alimony payments can result in a motion for contempt to be filed, and if approved, can lead to other means of enforcement including wage garnishing

What is the Legal Process?

Immediately upon agreeing to divorce any individual seeking spousal support must come forward and file a motion for it. A spouse can ask the judge to make a spousal support order as part of divorce, legal separation, annulment or a domestic violence restraining order.

If the couple cannot agree to this arrangement or to a fair monthly amount, a judge will decide if the individual is indeed entitled to the alimony, and if so exactly how much. Alimony will either be granted indefinitely or for a limited amount of time depending on the couples current and future circumstances.

Final Thoughts

An expert family lawyer will be able to provide end to end legal services for divorcees and those trying to navigate alimony, child support, custody and other legal cases. Learn more about the expert team at Family Law Richard E. Young & Associates, our convenient services, free consultations and much more on our website or by giving us a call at (949) 951-9529. We have proudly served countless families in the Orange County community with their alimony, divorce, custody, and bankruptcy cases since 1974.

Warning Signs of a Bankruptcy

Economic times are tough and many people may find themselves on the shorter end of the stick when it comes to finances. This can be due to loan debts, overwhelming bills, low wages, business and personal expenses, and much more. Unfortunately, some individuals may not realize that they’re heading towards bankruptcy before it’s too late. Being aware of the warning signs and getting expert advice early on can help in avoiding the worst case scenario.

What Are the Warning Signs?

People that file for bankruptcy often make the mistake of waiting too long before seeking advice from a bankruptcy attorney. Here are some warning signs you should be aware of:

1. You don’t have savings.

Living paycheck to paycheck can be tough because you’re spending your money as quickly as you receive it. If you don’t have any savings set aside for emergencies, an unexpected event or disaster can set you back and easily cause you to fall behind on paying important bills.

2. Your debt-to-income ratio is high.

A debt-to-income ratio is the percentage of monthly income that goes towards paying your debts. For example, if you make $2000 per month and $1000 is going towards paying off bills, then that means your ratio is 50%. A significantly high ratio will affect your ability to apply for loans.

3. You’re struggling with debt collectors.

Receiving demands and notices from debt collectors is another red flag. This occurs when a debt goes unpaid for longer than 180 days and the creditor sells the debt to a debt collection agency.

4. You have high interest rates due to being late on credit card payments.

Being unable to pay more than the minimum payment will incur additional interest on the remaining balance. If you find yourself unable to catch up and pay off your balances for an extended period of time, it’s likely you will be stuck in that cycle of debt.

5. You’re struggling to pay off substantial medical bills and expenses.

Having inadequate health insurance or none at all can lead to expensive medical bills in the case of unexpected injuries, medical conditions, or hospitalization. A significant rise in debt due to medical bills can force you to file for bankruptcy. 

6. Your personal relationships are being affected by your debt.

Having large amounts of debt is a huge financial burden on your life. This leads to feelings of stress and can cause arguments with loved ones – further straining your personal relationships. People often tend to hide their debt and keep their loved ones in the dark, which can also be a strong sign of a debt problem.

Get the Help You Deserve

If multiple warning signs apply to you, you may be on the verge of bankruptcy. We highly recommend that you seek out legal advice from a qualified bankruptcy attorney before it’s too late. Rely on Family Law Richard E. Young & Associates and schedule an in-depth consultation today! For more information, please visit our website or call (949) 951-9529.

Reversing a Legal Separation

The process for a legal separation is essentially the same as for a divorce, but with the option for it to be reversed. Unlike divorced couples, legally separated couples can reconcile their differences in court, re-enter the marriage, and return to joint status. Below, we discuss the required steps for couples hoping to reverse a legal separation in the state of California.

Step 1

The most important factor in reentering a marriage following a separation is that both spouses agree on doing so. Ideally the couple will have since resolved some or all of the major matters that initially lead to the separation.

Step 2

With your written Order of Legal Separation in hand, couples can draft a motion to Vacate Order of Legal Separation. This document is essentially the formal document needed to ask the court to review their request.

Step 3

One a motion has been drafted, the court will require you to draft an official Order to Vacate Order of Legal Separation. This is the second step in confirming with the court that you wish to be remarried.

Step 4

The final step is to file the Motion and Order to Vacate with the clerk of the family court where the legal separation was initially filed. Be sure to include a copy of the original Order of Legal Separation at the time of filing and keep in mind that there is typically a filing fee due at the time of filing, which must be paid before the motion will be accepted.

Final Thoughts

Southern California residents seeking to reverse their legal separation can trust that Richard E. Young Family & Associates will get the job done as quickly and thoroughly as possible. We will help you legally resolve any and all issues in family court including custody, child and spousal support, property division, separate and community property characterizations and disputes, business valuations and division and more!

Legal Separation vs. Divorce

When married couples find themselves at a crossroads it’s often a choice between separation and divorce. What separates these legal processes can be confusing and most couples are often left with more questions than answers. In this month’s blog, we define and clearly distinguish the similarities and differences between filing for legal separation vs filing for divorce in California.

Definitions

A legal separation is defined as an ordered agreement in which married couples have legally defined boundaries and responsibilities. This is often a three to four month process that couples take prior to filing for an official divorce sometimes due to financial or religious reasons, or because it was required by a judge. A separation can be reversed in court upon all parties’ agreement in the decision.

Divorce is the irreversible legal dissolution of a marriage in court. This process will take at least six months of hearings, negotiations, and court ordered agreements before it will be finalized by a judge and made permanent.

The Similarities

It is not necessary for both spouses to agree to end a marriage when separating or divorcing. In California, couples filing for these processes also do not have to prove that there was a ‘fault’ by either spouse that lead to the decision.

Throughout both of these processes couples will have to agree on the terms of child custody and support, alimony, child visitation, attorney’s fees, and the division of assets or property. So essentially, the settlement agreement in a legal separation is almost identical to a divorce settlement agreement.

The Major Differences

The main difference between legal separation and divorce is that when a legal separation is finalized, the parties do not revert to “single person” status. This is important to note for taxes and health insurance reasons. Ultimately, the most notable difference between legal separation and divorce is that divorce is final.

Final Thoughts

If you or someone you know is preparing for divorce or legal separation in Southern California, it’s crucial that obtaining a lawyer comes first and foremost. When choosing Family Law Richard E. Young & Associates as your counsel you will benefit from decades of industry experience combined with a reputation for honesty and success. Visit our website or call us today at (949) 951-9529 for your free initial consultation.

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