Debts are clearly defined; money or other consideration owed to another party. Debts can be loans, lines of credit, credit cards, personal debts, mortgages, taxes or support owed.
Assets, on the other hand, can take many forms. An asset can be something liquid, like a bank account balance, or intangible, like patents or earning potential. Basically, an asset is anything that holds value, where that value can be accessed.
All things that hold value must be divided in a divorce, if they are community property. If they are partly the separate property of one spouse and partly community property, the community property share must be divided.
Many things can hold value. Common assets include real estate, cash, investments, retirement accounts, business interests, tax refunds, life insurance with cash value, vehicles and jewelry. Sometimes what constitutes an asset is disputable between two divorcing parties however the basic rule is if it has real value, it is an asset. For example, an espresso machine from Italy that has a resell value of $3,500, while in theory just a household appliance, can be considered an asset and thus must be taken into consideration. Just because something is an asset does not mean you must give it up or sell it to split the proceeds.
It is important to note that the goal of property division in a divorce is to equally divide the net-value of the marital community. All the community assets minus the community debts will give you the net value and that is the number that must be divided equally. Who gets what asset or takes what debt remains something to be negotiated.
Asset division can be a complex part of divorce and can require litigation in court or financial mediation. If you have significant assets and are in disagreement with your spouse on who takes what, you may want to consult with a family law attorney experienced in complex property division. A skilled attorney will be able to evaluate all your community assets and work with the other party’s attorney to arrive at a division you can both agree upon.
If you are in the Los Angeles or greater L.A. area and have questions about property division during divorce, Certified Family Law Specialist Mark H. Karney can help. Attorney Mark H. Karney and his skilled complex divorce litigation team can provide expert counsel to ensure you walk away with the all the property you are entitled to. Call our Los Angeles office at 310-622-9434; email us at firstname.lastname@example.org or contact us through our online form today to schedule a free consultation.