Property Division Q & A

The following is a sample of email messages I received concerning property division issues.

 

Question. When I married my husband he had a poor credit record and I had a good one. So many things we bought were put in my name and his. He got better paying his bills for a few years. But my name still remains on loans. Can I get this changed so that we both are obligated to repay them?

DG

 

Dear DG,

The divorce decree should divide all assets and debts equally. But, your creditors are not bound by whatever is decided in your divorce for the assignment of the debts, so be careful regarding any account on which your name appears. If such a debt is assigned to your husband, but he does not pay, the creditor may come after you, and your credit will be affected if he fails to make payments when due event though you are not aware of it. You should have a complete review of your case by an attorney so that you understand your rights and how a divorce court would go about dividing your debts.

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Dear Salomon

My husband and I are getting a divorce. My husband’s mother is elderly and on social security. Several years ago, she gave us her savings account with about $200,000 in it at the time. We only use this money for her needs, but at one point, we added her money to CD accounts we had in our names for convenience.  We have been paying the taxes on the interest. Can we divide this money in our divorce? 

GD

 

 

 

 

Dear GD

If the money is his mother’s money, then it’s not community property for division in a divorce. But it is unclear whether your husband was merely holding your mother’s money for her, or if she meant to give it to him or to the two of you. This needs to be clarified. Paying taxes on money does not make it community property. Both parties are required to report their separate incomes on their joint tax returns. If the money is a gift from his mother to him, it is separate property, and he may be obligated to pay taxes on the income from that money. The commingling of money can sometimes destroy the separate character of money, but if he can show deposits of separate funds to joint accounts, he should be entitled to reimbursement of the original principal without interest or appreciation.

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From: ~~~ Julia ~~~

We discussed divorce, and he has told me that he will take me for every thing we have together.

We have over $100,000 that we put down on our home, and over $30,000 in savings.

We owe my parents over $16,000 from a loan they gave us when we got married, which is no longer legally documented.

We also have over $36,000 in another savings, under our two names, but that money is my husband's fathers, but in our name.

Also, I will be receiving a settlement from worker's comp. for my injuries.

So I guess my questions are:

1.    Is he responsible in helping pay off loan from my parents?

2.    Does he have any legal rights to my worker's comp. settlement-

3.    Is his father's money legally ours to split up-

4.    Who gets the home, do we have to sell it, and my son and I forced to find a place to live-????

5.    One last question, I have been told that I have to be married 10 years before I will be entitled to his pension, when I reach retirement age. Is this so? PLEASE HELP.

Julia

 

Dear Julia,

I guess my answers are:

1.    The loan from your parents sounds more like a gift. You say there is no documentation for it and it sounds like your marriage was long ago. 

2.    The part of your worker’s Comp settlement that represents reimbursement for lost wages may be considered subject to division. Any part of the settlement for permanent disability or future wage loss is not divided. 

3.    His father’s money is not community property.

4.    The court should give you the first opportunity to buy out your husband’s interest. There are many ways to settle these questions and the court may also have many options. In some cases, the court may defer the sale of the residence under special circumstances. 

5.    Pension rights and benefits earned during the term of the marriage are community property and must be divided, no matter the length of the marriage and no matter whether the pension rights are vested. 

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Dear Salomon

Sorry about my pessimism but that is what divorce can do to you. I am 24 and my wife, also 24, has filed for divorce after five years of marriage. While we were married I pursued an education and will finish my B.A. from U.C.S.B next year. My wife chose to not pursue an education during our marriage despite her having the opportunity to do so. My question is: is the value of my degree considered part of community property?

Scott

 

 

Dear Scott,

Good question. Some time ago there was quite a controversy over whether an education or degree could be considered property to be valued and divided. The courts went in circles over a case called Marriage of Sullivan. Finally the legislature stepped in and passed Family Code Section 2641, which provides that the community is entitled to reimbursement for payments made for education or training that occurred less than ten years prior to the filing of the divorce provided the education enhanced your earning capacity.