Asset division in community property states.

[Lobouspo]

So I moved into my wife's house, when we got married. Separate accounts. Ive been writing her a check directly every month for mortgage payment but I never put my name on the mortgage. In a community property state would I still be entitled to half of the homes worth even though my name is not on it but we are married?

[carhill]

Yep, it'll need a contested divorce and a forensic accountant presuming you and she don't agree on an equitable division with a settlement agreement or similar.

It gets complicated with co-mingled community and separate property. Easy calc is she had X equity in home when you got married and home has Y equity now. Y-X = Z co-mingled equity that would be split equally. Equity she had prior to being married, if an equitable settlement, would remain hers. Some could be used to offset other settlement items depending on the matrix of the settlement.

Main thing is document your expenditures into the community property portion.

[carhill]

One example of a complicating issue is if she held title prior to being married as a single/divorced woman, e.g. Jane Doe as a divorced/single woman, with the mortgage in her name, then after married, refinanced that mortgage, again in her name only and the new deed might reflect her married status, forex holding title as Mrs Jane Smith, a married woman, as her sole and separate property. If that mortgage remains when you get divorced, it's her sole debt, even though you may have written her a monthly check for the mortgage; those funds are considered community property, and should be accounted for in the marital settlement of the asset. There are many avenues of settlement. There also may be tax ramifications of different avenues of settlement. I typically use the 5% rule, that I'll spend up to 5% of the prospective value of the asset to obtain competent legal and accounting advice regarding it. So, forex, if you're talking about 100 grand, that would be 5 grand. If a million, 50 grand. Etc, etc. 

[Lobouspo]

Thx Carhill

No final decisions as of yet. Do you know if the higher earner is responsible for part of the lesser earners legal bills?  Ive come across this in some of my research. Also seems men seem to really get the short end of the stick in these procedures. Especially when kids are involved

[PegNosePete]

You need a lawyer to answer these questions.

Normally in divorce proceedings each party pays their own legal bills. That's the theory but in practice it can be more complicated than that. For example if it's a needs-based case then the poorer party may need more capital in order to cover their debts and still maintain a property, and those debts may include their legal fees.

That is why you need a lawyer to answer these questions.

 

[Lobouspo]

Another question I had.  We have separate accounts.  If I started taking cash out and buying gold, in cash with no paper trail. Is that a good way to protect assets?

[PegNosePete]

"Decimation of marital assets" a is well known scam and judges in most jurisdictions will hold it heavily against you.

 

[carhill]

IME, better to be straightforward. However, at least in my jurisdiction, pre-filing marital behavior regarding finances is generally not considered. Spouses buy stuff, sell stuff, borrow money run up credit card debt, whatever, and it's all part of the legal partnership, however distasteful another spouse might find it. Cash is a strong part of the underground economy, sure, but it doesn't exist in a vacuum and doesn't generally 'disappear', especially in large amounts. Anything purchased with it is considered marital property, at least pre-filing, and sure one can hide stuff but if the court tracks it down due to a spouse/their lawyer with a good nose, that could portend poorly for one's judgment of the court and in some places criminal charges could attach. Likely, probably not the criminal part, but judges don't like being lied to, presuming it gets that far.

Forex, I was caregiving when we divorced and was 'impovershed' so exW didn't really have much to go after besides my business property that I'd owned long before she showed up and I dangled a house in front of her and she took it willingly. That taught the lesson of figuring out what motivates the departing spouse to depart and facilitate that. The 5% rule played into that; my lawyer came up with the strategy, including being impoverished. It's a gift that keeps giving to this day. I love it. It might not be right but it sure is legal 👍

[carhill]

11 hours ago, Lobouspo said:

Thx Carhill

No final decisions as of yet. Do you know if the higher earner is responsible for part of the lesser earners legal bills?  Ive come across this in some of my research. Also seems men seem to really get the short end of the stick in these procedures. Especially when kids are involved

In my jurisdiction generally each party is responsible for their own representation; however, they can agree to anything, with the main caveat being that they each are represented by separate counsel.

One trick that works, again where I lived, was consulting with as many big name attorneys in the area as possible. Why? If they consult, even for free as an interview, they can't legally represent one's spouse. That trick was taught to me by a business colleague in the realm of business lawsuits. One opponent of his, a large, old business concern in the area, consulted so many that he had to go over 100 miles away to find an attorney to handle his case.

IMO, the key is keeping as much of the dissolution as amicable as possible and use as little of the legal system as possible. If this is your/her first time, it could seem daunting. One day at a time. It'll work out.