Nowadays, it’s more common than ever before for married couples to be older when they get hitched for the first time. Not only has the age of newlyweds been increasing over recent years, but many people have also remarried (and more than once), pushing their ages to even greater heights. This trend results in several middle- and upper-class people beginning their marriages while they hold substantial assets.
Of course, upon marriage, these couples inevitably commingle their separate property, which makes it difficult for each partner to ascertain where to draw the line between community (or marital) property and separate property—especially for those who are further along in life. This is true even when the couple has entered into a prenuptial agreement. Regardless, it’s almost always difficult to figure out whether a particular asset is community or separate property during any divorce proceeding.
Courts generally seek to divide community/marital property under principles of equity, and separate property often remains separate and undivided. Most commonly, property a spouse acquired before marriage, such as by gift or inheritance, will be found to be separate property and not subject to any division.
The main purpose for division of property is to promote fairness, yet courts may have difficulty deciding whether the couple’s property is separate or community, and this is especially true when either or both of the spouses have several high-value assets. Problems may arise when the property at issue initially seems to be community property but may turn out to be construed as separate property after a due diligence search known as “tracing.”
The experts from Divorce Options San Diego—experienced professionals who are transforming the divorce process with expert divorce mediation San Diego couples rely on for creative customized divorce solutions—offer these tips to aid you in tracing and simplifying your distribution of assets for divorces involving complex marital estates.
Characterize the Assets
Investment properties (e.g., residential, commercial, and agricultural real estate), retirement plans, trust funds, pensions, 401(k) accounts, individual businesses (small or large), unvested stock options, offshore money, and intellectual property such as copyrights, patents, and trademarks are common examples of challenges in regard to complex marital estates. The big problem with ascertaining whether such assets are separate property or precisely what part of them is community property (and thus subject to division) lies in the ability to trace the source of those assets based on how they’re characterized.
To help in characterizing and tracing assets, it’s best to obtain the advice of qualified professionals who have a great deal of experience in this area, such as divorce lawyers, certified divorce financial planners, appraisers, forensic accountants, tax advisers, and estate planners.
Check if You Have a Power of Attorney—You May Need to Change It
If you and your spouse signed powers of attorney, get them out and revoke them before it’s too late, particularly if the divorce isn’t amicable. You don’t want your spouse to have any more access to your assets and/or accounts, which includes access to assets in your name alone. It’s simply too risky while you’re going through divorce proceedings and thereafter. You need to revoke that power of attorney, execute a new one, and possibly provide notice to your current spouse of the revocation. This process is typically done through an attorney or divorce mediator.
Update or Amend Your Trust or Will
In some states, you can make a new trust or will so your spouse is no longer in charge of your estate. You should think about whether you wish to remove your spouse as trustee or executor. Also, consider whether you want your spouse to be the guardian or manager of your minor children and whether to name an alternate manager or guardian. You may also want to disinherit your spouse in your will. Additionally, if you have a trust, you may wish to remove gifts to your spouse. Furthermore, you should contemplate removing your spouse from having access to and/or control of money for your children.
Review Your Estate Plan Once Your Divorce Becomes Final
After your divorce is finalized, you’ll want to evaluate and reassess your estate plan and focus on anything that needs to be updated, including such things as beneficiary designations.
If you need more detailed information about divorces involving complex estates, reach out to the experts from Divorce Options San Diego. Even if your divorce involves intricate financial issues, you still don’t have to spend a lot of money on lawyers. Every aspect—financial, legal, and practical—of amicable, respectful divorce agreements can be managed by Divorce Options San Diego’s trustworthy, experienced divorce mediators. San Diego couples can rely on our thorough mediation process, one that’s so comprehensive there won’t be a need for attorneys to get involved. We perform all our services ourselves—we’re the experts, so we don’t hire outside professionals. To find out more about how we can assist you with every part of the divorce process, call us today at (858) 281-2628.
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