Regardless of the situation, divorces are always a complicated time where assets, debts, and child custody are at the forefront of the proceedings. Divorce cases involving CEO’s, CFO’s, and other high-level executives tend to be more complicated than the common divorce situation. High net worth individuals have complex property portfolios, own businesses, stocks (non-wage benefits), pension funds, vehicles, and different estate. Divorce proceedings ensure that all assets, properties, and non-wage benefits are divided equally amongst spouses.
San Diego Family Law Attorney understands the complex divorce issues that are specific to high-net-worth or executive individuals. The higher earning spouse in the relationship has more to lose than the other. Our attorney’s guarantee reliable guidance throughout the property and asset division process to ensure both parties come to an agreeable outcome. We are ready to represent both sides of the situation with discretion and a high level of confidentiality and professionalism.
We work with trusted evaluators who are capable of evaluating your non-wage income and other complex properties. We understand that each property and asset is of high value which is why we encourage you to talk with one of our attorneys to determine the best process for you after a divorce is filed.
We are experienced in working with:
- Intellectual property - trademarks, patents, copyrights, and royalties
- Personal company interests
- Landholdings both residential and commercial
- Stock and other financial investments
- Retirement accounts and pension funds
The lawyers at the San Diego Family Law Firm are ready to take on your case and present you with an appropriate and detailed plan for your divorce. The division of property is a complicated issue, if any mistakes are made during this process it can be very costly. San Diego Family Law Attorney provides many outlets to protect your property in the event of a divorce.
Division of Property
In order to fully understand how your property and debt will be divided, you must understand how property is defined in the state of California. Property is anything that has value, that can be sold, bought or traded. Property can be a house, an automobile, clothing, furniture, bank accounts, security deposits, pension plans, retirement plans, stocks, insurances, and business. When filing for divorce, the individual must understand that each property is considered community or separate property. Prenuptial agreements or other property division agreements, ensure that each spouse provides full disclosure of their property and assets and then allows them to set aside their separate or community property.
When you get divorced or legally separated, the court makes decisions about how to divide the property that the spouses or domestic partners acquired during the marriage. Many times couples divide their property and debt amongst themselves through mediation which is highly recommended before entering a trial. In the event that both partners signed a property division agreement, the document must be signed by a judge in order to be legitimized and finalized.
Community Property and Quasi-Community Property
‘Community property’ states such as California, see two individuals that are married or registered as domestic partners as one legal entity. All property that is acquired during the partnership or marriage is considered community property or property that is belonging to both individuals. Community property is anything of value that was purchased with money that was acquired by two individuals either in a marriage or in a domestic partnership. In addition, debt is also shared in what is known as community debt.
It can be difficult to determine community property at the time of a divorce, but it usually a good idea to follow where the money came from to purchase the property. For example, if you purchase a home with money you have saved from your paycheck, and this paycheck was consistent throughout your marriage, then the home would belong to both spouses. Even if you paid the house out of your earnings, the earnings you acquire during your marriage or partnership are considered to be community property. Therefore, the home belongs to the two individuals because this property is considered to belong to the community.
In addition, there is a quasi-community property clause that divides property or assets that were purchased outside the state of California. If you previously owned property outside the state of California and you are now filing for divorce within California, your previous property is considered quasi-community property. Quasi-community property or property that was acquired during a marriage or domestic partnership outside the state filing for divorce, is considered community property and will be treated as community property in the state of California.
Separate property is considered as all of the following:
- Property owned by either individual before marriage or before the domestic partnership
- Property that was acquired by an individual after marriage or after the domestic partnership
- Earnings and property accumulated by a spouse while living away from the other is considered separate property
Separate property includes inheritances and other gifts belonging to one spouse, even during a marriage, inheritances are considered to belong to one spouse. For example, your grandparent left you an inheritance and you decide to buy property with your inheritance. The money used to buy the property was gifted and therefore the property acquired is considered to be separate property. In addition, any money that was acquired after the date of separation is considered to be separate. It is crucial to establish and keep a date of separation as it will help determine when the individual is no longer in a community property relation. To determine what is separate or community property, it is always a good reminder to look at the source of the capital that was used to buy the property.
Non-wage incomes such as stocks, pension plans, and other compensations are also considered to be a property of value and therefore must be divided in the event of a divorce proceeding. Non-wage incomes are very difficult to evaluate and divide which is why you must consult with a specialized person on how these non-wage incomes can be divided.
Non-wage compensations can come in the form of stocks in shares of the employing company. Stocks become very complicated given that some stocks may not be touched for a certain amount of time. If the stock is to be accessed a year or some years after a divorce is filed, it becomes a difficult situation when deciding how much of each asset will be given to the other spouse. The marital non-wage income is a complicated issue when taking into account vesting schedules, dates of marriage and separation. Executive divorces will usually involve a high level of stocks, retirement accounts, different businesses, and bonds. These assets require an experienced attorney who knows how to evaluate and divide the value of your properties.
In some cases, depending on where the money came from, the property can be considered both separate and community, otherwise known as commingled property. Commingled property is a property that was invested by a spouse with his or her separate property during his or her matrimony. Commingled property is not easy to review and requires special consideration to determine how the property will be divided in the event of a divorce.
More frequently than not, an individual will use his or her own separate assets to buy a property after establishing a domestic partnership or matrimony. For example, if an individual sells his or her car (which was owned prior to the marriage) and then uses that money as a down payment for a new car (bought while in a marriage or domestic relationship) the down payment would be considered separate property. If the car payments are paid for using either spouse's income, the car investment is considered community property and the car as a whole would be considered a commingled property. In this case, the married couple used their income to pay for the car while the separate property was used as a down payment.
Prenuptial Agreement and Postnuptial Agreements:
Prenuptial Agreements also are known as ‘prenups’ they are important pieces of documents that if processed in the correct manner, can save you lots of property and assets. The state of California which divides property and assets acquired during a marriage or domestic partnership protects the right of an individual to maintain what he or she understands to be separate property. Through a prenuptial agreement, either individual has the opportunity to disclose all of their belongings to one another and establish what will remain to each other in the event of a divorce.
We highly recommend that each party is present with their own attorney to increase the number of witnesses during the signing. During this process, all assets and properties are disclosed to one another. It is recommended that you explicitly describe all of your properties or assets to your partner. In doing so, the partner in the future will not be able to claim that he or she unknowingly signed the document. After stating all properties and the prenuptial agreement is reviewed, both individuals must wait a minimum of seven days before signing the document. Once signed the agreement becomes finalized and each other's properties and assets are protected in the event of a future break up.
Through premarital agreements, individuals have the opportunity to abandon their right to community property. Prenuptial agreements honor provisions for the division of property and spousal support after a divorce was filed.
If you are still married and you would like to protect your properties or assets, you may find the postnuptial agreement more in your favor. The Postnuptial agreement like the prenuptial agreement are both pieces of documents that protect the separate assets and properties of each individual in the case of a divorce. The only difference is that one agreement is signed before marriage and the other is signed and established during matrimony.
Postnuptial agreements began to gain popularity in the United States after the No-Fault Divorce Law was introduced in 1969. With the adoption of the no-fault divorce law, divorce became possible without the need to accuse a partner of an offense. The increase in divorce paved the way for the acceptance of the postnuptial agreement.
To assure that both your postnuptial agreement and your prenuptial agreement are honored you must remember that:
- The agreement must be stated in writing
- The agreement must be agreed upon by both individuals without coercion fromeither side
- Full disclosure of assets and properties to ensure your agreement is honored by your spouse
- The provisions of each side must not be unjust to the other spouse
- The agreement must be signed by both parties (attorneys should be present to represent both parties at the time of the signing and negotiation)
Postnuptial agreements and prenuptial agreements are essential components to any marriage involving high net-worth individuals. These agreements are encouraged as they will dispel many of the asset division issues that arise after a couple files for divorce. To ensure that your postnuptial or prenuptial agreement is honored after your divorce, you must assure yourself that there was full disclosure between the spouses of each other's assets. The document must be in written form and signed by each individual. Transparency and special consideration of the other spouse will allow for the best outcomes after a divorce is filed.
Hiring the Right San Diego Executive Divorce Attorney
Executive divorce cases differ greatly from ordinary divorce proceedings. Executive individuals have high incomes and usually have complex property portfolios, this typically means one side has more to lose than the other. These assets must be valued properly so that an honest and just negotiation can take place with your spouse. Divorce laws assure that each spouse is awarded what is rightfully theirs in the event of a divorce. In addition to the division of assets and property, divorce between high net-worth individuals can become more complicated in the presence of child custody and child support allegations. Please contact the San Diego Family Law Attorney at 619-610-7425. We are ready to assist your case and provide you with the next appropriate steps for your divorce.