Divorces involving significantly large properties are not rare in California. Ordinarily, separating couples can navigate their ways through a division of assets by themselves when both parties to a divorce can agree upon the same thing. However, until the issuance of a final order by a judge, a divorcing couple’s community property and debts belong to both parties.
That is to say, until a formal signing off by a judge the community property of a separating couple does not transform into separately held property, even if the division has been mutually agreed upon. The aim of such a division is always fair and equitable division of marital property.
In order to achieve the common aim of all such divisions of marital assets, which is a just and impartial distribution between the two parties to the divorce, a separating couple must make the effort to draw up an agreement between them, which both parties agree upon. The agreement should be drawn up in such a manner that the community property and debts are fairly equally divided, and each party ends up with similar value of property.
Divorcing couples must remember, while dividing their debts and property, the objective is to do it in such a way that the process generates an equal net-share of property, or something close to it, on both sides of the table. In order to do that, the simple logic that needs to be applied is to add up the respective values of all assets belonging to the couple before subtracting the sum total of all the debts incurred by the couple.
The remainder of the exercise is the value of the community property which is subject to an equitable division of assets between the parties. This not only does justice to the two individuals undergoing a cataclysmic change such as a divorce, but also reduces confusion and enables a judge to make a speedy decision.
Source: Courts.CA.gov, “Dividing Property and Debts in a Divorce,” accessed on Oct. 3, 2014