Most people may understand that when a couple divorces in California the issue of property division is addressed. Obviously, each household has its own asset and debt structure.
Some people own small businesses, while others do not. Some people may own stocks and bonds. Some people acquired property before becoming married and kept that property separate from the marriage, where other couples may have commingled all of their assets in a variety of ways.
Because there is not one-size-fits all financial structure for every family, there is no off-the-rack coat to cover the shoulders of every property division settlement. But, the law has a general framework to facilitate how property should be divided, and a property division should be equitable.
Tracing what property falls within the marital property estate is important to ensure that a party in a divorce receives an equitable part of the marital property. But many considerations may influence what is equitable. Tax considerations may be important in many divorce proceedings.
For instance, there may not be a one-size-fits-all assessment to investments. We have spoken about dividing qualified retirement accounts and 401(k) accounts as a part of a divorce. But issues concerning taxes may be a vital consideration in determining the value of the asset, especially when dividing many types of investment opportunities.
The equitable value of stock position may include considering the cost basis of the stock when compared to a second investment to better assess real value. Legal counsel and financial planning assistance may be valuable in assessing assets.
Source: Wall Street Journal, “Scrutinizing a Proposed Divorce Settlement,” Kimberly Weisul, Aug. 13, 2013