Monday, April 15, 2024

How To Properly Divide Assets During a Separation or Divorce in California

Today in this article we are going to talk about the topic “how to properly divide assets during a separation or divorce in California”. This is a common topic nowadays and some people are unfamiliar of it. So they need to hire attorneys for the assets division. We will see in this article how the divorce lawyers in Palo, Alto CA settle the matter of asset’s division.

We often see through divorce is when the division of assets are happening once spouse gets the house and another spouse is entitled to the pension. Sometimes you must have a question, what do you do to make sure that this can be equalized because a house is not taxable or sold well a pension is fully taxable’s income also.

Well the big thing the attorneys do is they look through the division of assets so when they are looking at the house the house is worth a half million dollars and the pension is worth a half million dollars that actually are not equal.

So the attorneys need to match dollar for dollar so they need to actually consider the tax consequences when that one spouse is going to collect that pension down the road. So that half a million dollar pension is no longer half a million dollar so the attorney needs to look at what their tax bracket is? So if their tax bracket is around the 30 percent the attorney actually needs to deduct 30% off to match dollar-for-dollar to equal the house.

So now the question comes, how the attorneys equalize if it’s half a million and then after the tax comes off the division of asset aren’t equal?  How the attorneys equalize it?

So that’s the time so if you are looking at always the example half a million dollar house and half a million dollar pension on and using a 25% tax bracket so now the attorney looking out a pension three hundred and 75 thousand versus a five hundred thousand dollar home. So the attorney needs to balance it out so that’s when the one spouse keeping the home is going to remortgage their home in order to pay out the other spouse to compensate it so they have an equal division of property.

How do we divide community property after separation in California?

In California from the date of your marriage into the date of separation what you have, what we call community property and that means any assets or debts or income that you received during the marriage during that time is considered community property. And it is divided when you dissolve the marriage. So you don’t have to cut everything in half instead what you do is you make a balance sheet.

So for example, if you have a house and 401k and they are worth about the same in terms of equity, one person one spouse may take the house, the other spouse may take the 401k. So that’s how the attorney do it but once the attorney have the balance sheet he looks at who owes who what and he looks at the difference between the two sides and then he divides it by two. So if the attorney needs to he can get a forensic account to value of business he does all that jointly in mediation. So you don’t have the battle of the experts.


When the spouse decides to dissolve the marriage, they get frightened oh my god we have no idea what’s going to happen to us now. First of all dissolution of marriage isn’t a solution of anything I must say first you try to resolve your matters amicably. If nothing works out and you have decided to end up your relation, there is nothing to worry about.  Hire a good attorney and solve the matter amicably.

Hank Pedro
the authorHank Pedro