How will we divide our assets in a divorce?

Full question:

My husband and I have decided to end our marriage due to personal differences. We both are real estate brokers and have substantial assets together. In the event of a divorce, how will we divide our assets?

Category: Divorce
Subcategory: Property Settlements
Date: 04/07/2025
State: California

Answer:

In California, it’s best for couples to negotiate how to divide their joint assets during a divorce. Typically, each spouse's attorney will work together to reach an amicable settlement. Courts prefer this approach, as it allows couples to maintain control over their asset division.

If there’s a prenuptial agreement, its terms will apply once the divorce is filed, unless the court finds them unacceptable. In such cases, the agreement's provisions will generally prevail, preventing claims on excluded assets.

If spouses cannot agree on asset division, the family court will intervene. For properties like a house, assets do not need to be liquidated; the court may order one spouse to buy out the other’s share or offset one asset against another. Additionally, property acquired during the marriage may not be considered separate just because it’s titled in one spouse's name. The court will review the title and other factors to determine asset classification.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

How does an equity buyout work in a divorce?

An equity buyout in a divorce occurs when one spouse buys the other spouse's share of a jointly owned asset, like a home. The buying spouse pays the selling spouse their portion of the equity, which is the market value of the property minus any outstanding mortgage. This allows one spouse to retain ownership of the property while compensating the other for their interest. The court may require a professional appraisal to determine fair market value during this process.

How to divide a brokerage account in divorce?

To divide a brokerage account in a divorce, both spouses must first determine the account's total value. Generally, assets accumulated during the marriage are considered marital property, regardless of whose name is on the account. Couples can negotiate a settlement where one spouse retains the account while compensating the other, or they may choose to split the account equally. If an agreement cannot be reached, the court may intervene to decide the division.

How is home equity split in a divorce?

Home equity is split in a divorce based on the total value of the home minus any outstanding mortgage balance. Typically, the equity is considered marital property, and both spouses have a right to it. Couples can negotiate how to divide the equity, either by one spouse buying out the other's share or selling the home and splitting the proceeds. If no agreement is reached, the court will determine a fair division based on various factors.

How is equity split in a divorce calculated?

Equity split in a divorce is calculated by determining the total value of the asset and subtracting any debts associated with it, such as mortgages. For example, if a home is worth $500,000 and has a $300,000 mortgage, the equity is $200,000. This equity is then divided between the spouses, often equally, unless otherwise negotiated. The court may also consider other factors, such as each spouse's financial situation and contributions to the marriage.

Are your assets before marriage protected?

Assets acquired before marriage are generally considered separate property and are usually protected in a divorce. However, if these assets have appreciated in value or if marital funds have been used to maintain or improve them, they may become subject to division. A prenuptial agreement can further clarify the status of pre-marital assets. It's essential to document ownership and contributions to ensure protection during divorce proceedings.