COVID-19 has triggered a major recession exposing the many inequities in our society. Millions of Americans have filed for unemployment and are struggling to keep a roof over their head while in some parts of the country, the housing market is heating up and home prices are on the rise. If you are considering a divorce, no matter your current financial situation, it’s important to recognize how the pandemic is affecting family law courts and property values.
Stay-at-home orders have impacted the justice system and many courts are closed or only open for emergency hearings. Some judges are holding limited remote hearings via telecom or video conferencing platforms and will sign agreed temporary or final orders during this period. However, property conflicts have a lower priority than custody conflicts that involve the best interest of children.
California requires equal division of all marital community property. The court can either divide property in half what’s known as an “in-kind division”, or it can award one item of property to one spouse, and offset this award by giving the other spouse an equally valued property item.
One of the first steps before filing for divorce is to identify all marital assets and property and determine the value. Dealing with the division of property is often hard because it can spark powerful emotions. Do your best to reach an agreement about how you want to divide household goods and personal property. A family law attorney can help you decide which assets an expert should appraise such as a family business or real estate.
There are many factors to consider such as tax consequences or replacement values before you decide whether it’s worth fighting to keep an asset. Perhaps you and your spouse lived in the family home for many years but your post-separation finances make it difficult for either of you to remain living in the home. If you and your spouse can’t reach a compromise, a court must decide whether the property will be sold or whether it will be awarded to you or your spouse.
Other assets such as cars, boats, and furniture can be divided by reaching your own agreement with your spouse. The value of those items is based on their fair market value not what you paid for the item. If you and your spouse can’t agree on how to divide your personal belongings, and you need a judge to make the decision, it’s helpful to prepare a property inventory, which is a listing of the property you own.
If your home is going to be sold, the equity (what remains after you sell your house and pay off your mortgage) will most likely be divided at the time of the sale, after the costs of sale have been paid. If either of you or your spouse is awarded the house, there are a number of options for the other party to be compensated for his or her share of the equity in the marital home.
The process of divvying up assets in a divorce is difficult and even more so during a global pandemic. You will want the guidance of an attorney and a financial advisor who can advocate for you and ensure you understand the implications of all money-related decisions that you make.
By Debra Schoenberg