When doctors engaged in the private practice of medicine are involved in a divorce or legal separation, they may wonder what will become of their medical practice. Like other businesses, medical practices are generally divided in a divorce according to California's community property laws.
As we have discussed in earlier blog posts, California is a community property state. This means that in a divorce or a separation, the general rule is that anything which is considered marital property, or community property, will get divided 50-50.
Many people from all walks of life, but particularly those who earn a lot of income or have high net worth, may have their wealth tied up in assets that are difficult to put a precise value on. We've already discussed the difficulties of putting a value on a privately-held business, for instance.
Many couples in the Los Angeles area who are of means may have property beyond the residence and its furnishing, a couple of cars and a few savings accounts. This blog has in fact discussed things like offshore accounts and family businesses, as these and other complex assets often present special issues when it comes to dividing marital property in the event of a California divorce or legal separation.
Both for high earners and others in the Los Angeles area, one of the most valuable assets a couple may share is their retirement plans. Whether a pension, a 401(k), or some other plan, these accounts often are worth tens of thousands of dollars since couples use them to stash away money for their retirement.
People in the Los Angeles area probably recognize that home prices in Southern California are steep.
One thing that can be very tricky to divide during a divorce, or, for that matter, during a separation between unmarried couples who also were in business together, is a small, privately-held enterprise.
In the movies and other media, one might hear about a villain or even an edgy hero who hides money in an offshore account and then, perhaps at the end of the plot, escapes the country to live in a life of luxury.
Property division in a divorce is not as simple as some Californians may think. One might believe that everything will just be split down the middle and each party will go their separate ways. However, the division of assets is more complex than that, and any mistakes made could affect a person's financial future for the rest of their life.
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.