One of the big issues divorcing couples in California have to tackle is the division of their assets and debts. To start, keep in mind that California is a community property state for property division. This means that each spouse has a right to any property or debts acquired during the course of the marriage. When it comes to property division, the couple's community (marital) property and debts will be split approximately 50/50.
To begin the property division process, each spouse will need to complete and exchange a Schedule of Assets and Debts (Form FL-142). In this document, each spouse states what all of their assets are -- both separate and marital. It is important to be entirely truthful when listing one's assets, as well as ensuring the list is complete. Some spouses may try to hide assets in order to get the upper-hand during property division. However, most attempts at hiding assets fail, and the penalties one would face if they are caught hiding assets can be very serious.
Once each spouse has completed and exchanged their Schedule of Assets and Debts, they can sit down and compare them. Through doing so they can see if there is a disagreement about whether an asset is separate property or marital property. They can also see if there is a big difference in the value each side gives to the marital assets.
With this in mind, couples will be able to determine if it is possible to settle their property division issues out-of-court or if they will need to litigate the matter. Remember that when settling property division in California, the end goal is to divide marital assets and debts in a way that each spouse walks away from the negotiations with an approximately equal net share.
Property division is not always easy. Even if each spouse does not initially see eye-to-eye as to the status of an asset or debt as marital or separate, or even if each spouse does not agree on the value of a debt, these are issues that still may be worked out out-of-court. Often, out-of-court negotiations can take less time, be less costly and less stressful than a trial would be. Therefore, if it is at all possible to work one's divorce legal issues out out-of-court, an agreement may be reached that each side is satisfied with.