How Are Unique Assets Valued During Property Division?
How Does Property Division Work in California?
California is what is called a community property state. This means that any property (or debts) acquired during a marriage (marital property) is owned jointly by the couple. As a community property state, any jointly held property held by the "community" will be divided 50/50 upon divorce.
Dividing marital property is one of the most stressful aspects of a divorce. Couples that have been together for years often have complicated property holdings, including real estate, bank accounts, investment portfolios, and retirement accounts. Seeing these assets divided in half can be incredibly painful.
However, not all assets will be dissolved and divided. In some cases, a couple may work together to reach a fair agreement. For example, one person may agree to take on more debt in exchange for keeping a certain asset, like a retirement account or the family home. If the couple cannot come to an agreement on their own, they will have to go to court and have their case settled by a judge.
Examples of Unique Assets
When it comes to dividing a couple's more straightforward assets, like bank accounts, 50/50 property division can be relatively simple. However, if you and your spouse share more unique assets, property division may be more difficult.
Unique assets can include:
- China and other housewares
- Designer items, such as handbags
- Movie props
- Sports memorabilia
- Vintage cars
There are a number of ways you can approach dividing unique assets like these during a divorce. Some couples sell the items in question and then split the profits 50/50. This method is a good idea if neither you nor your former spouse has an emotional connection to the asset in question. Another option is to divide the asset in half. For example, if you have a sizeable wine collection, one spouse takes one half, and the other takes the other half. This option works well when the asset is, in fact, dividable in this way and when both parties are not opposed to the division of the collection.
Another option is for one spouse to buy the other out of the asset. However, this option only works when the spouse who wants to buy the other out has the ready money to do so. Relatedly, the spouses can negotiate for one spouse to keep one asset while the other keeps another. For example, one spouse keeps the vintage cars while the other keeps the fine art.
What About Pets?
While pets aren't generally considered to be assets in the traditional sense, they are an integral part of a family's life. When a couple who shares a pet divorce, it can be incredibly difficult to decide who gets the family pet. Often, a couple is able to work this out for themselves. If not, the matter must go to court, just like a dispute over property division.
Generally speaking, when a couple is divorcing and can't agree on who should get the family pet, the courts will decide based on what is in the pet's best interest. In some cases, the courts will award custody of the pet to one spouse, but there have been cases where a judge has awarded shared custody of a pet.
Review our blog to learn about the California law that addresses pets during a divorce.