What are some of the implications of divorce when it comes to your finances? From an earnings perspective, income earned during your marriage is usually community property unless you have a prenuptial or postnuptial agreement which states otherwise. Anything which was purchased, earned, contributed to or signed for from the date of the marriage until the date of separation will generally be considered to be community property.
This applies to a broad spectrum of assets and income. We are often asked about deferred income, stock options and other benefits usually associated with employment. These are all to be documented in the initial financial disclosures to the Court (and the other spouse) and are usually included in community property division. Retirement assets such as pension plans, 401(k)s, IRAs and all associated contributions during the course of the marriage must be divided as well.
The fact that income earned during your marriage is usually community property can be very concerning to those who earn substantially more than their spouse. One strategy is to seek fairness in a settlement through the process of mediation. The Court always has the responsibility to review and decide upon the merits of any settlement agreement developed by the parties. However, as long as agreements are reached without coercion and are fair to each party based upon the unique facts of the case the Court is likely to accept agreements reached by the parties.
While income earned during your marriage is usually community property it is quite possible to seek and achieve a more equitable distribution of assets and debts based upon the contributions of each party. Of course it is also important to consider the contributions and sacrifices of the lesser-earning party, especially when they were made to support a high wage earner. One example of this would be giving up one’s career to raise children or manage the household.
How will community property division be managed in your San Diego divorce case? Protect your own interests and contact us or call 760-434-3330 to schedule an appointment for a remote or socially distanced consultation with one of our experienced Certified Family Law Specialists.