California is a community property state. The expectation, then, is that property division upon marital dissolution will be a 50/50 split. Achieving that fair split, though, can be an elusive goal because valuations are so complex.
Accurate, reliable valuations are critical for property division and getting to a fair settlement. Different kinds of third-party vendors such as CPAs, appraisers, tax advisors and more, will be needed to develop accurate assessments of community property which can include but are not limited to:
- Real property
- Motor vehicles
- Art, antiques and collectibles
- A business or a professional practice
- Patents and trademarks
- Franchise agreements
- Stocks and bonds
- Bank accounts
- Pensions, 401(K)s and IRAs
Ultimately, if estimates cannot be agreed upon, for instance, in dividing a business which is a particularly complex task, then the judge will be tasked with assigning a value thereto.
The equalization payment
When the assets and debts are finally tallied up, an equalization payment may be needed to account for a discrepancy in asset division, to get to the 50/50 target. This remedy is considered a money judgment. It’s generally deployed much more often in community property states than in equitable distribution states.
Enforcing an equalization payment in a divorce decree
This money judgment is considered part of the property division. If, for whatever reason, a spouse refuses to comply with property division orders, further legal action would be indicated. One might be well advised to work with collection attorneys who have many options to use such as bank levies, real property levies, wage garnishment and turnover orders to remedy the situation.