I am contemplating divorce after 8 years of marriage in California and had a couple questions on my biggest assets. First the house, I think I am entitled to the house free and clear because when we got married I brought about $260,000 of equity in the original hosue we lived in. Our house gained value and we moved to another house and now that house has lost a lot of value. Due to my equity and what is owed on the house now I think the house becomes mine for there is only still about $260,000 of equity in the current house. Is this the right thinking? Also my 401K is in a similar situation where I had $300,000 of 401K brought into the marriage and now it is worth only about $320,000 so is she entitled only to split the $20,000 gain? Thanks for your answers.

You are right about the house but wrong about the 401(k).

You share the gains and losses equally on the marital contributions to the 401(k). So, say for instance, the 401(k) had $300,000 in it on the date of marriage, and you contributed $100,000 to it during marriage and it lost 20% due to market fluctuations. This would mean the 401(k) would be worth $320,000 today ($300,000 +$100,000= $400,000 - 20% (80,000)= $320,000). Your separate property share would be $240,000 ($300,000- 20% ($60,000)= $240,000) and the community share would be $80,000 ($100,000 -20%=$80,000), which you would divide equally. So, you would get $280,000 ($240,000 + $40,000) of the $320,000 and wife would get $40,000.

I am going through a divorce and my spouse has hired an attorney that charges $350/hour which of course has to be paid. This could easily become $10K - $20K so my question is does this money come out of our co-mingled money that would get split in the end (whatever is left). I have money aside for the kid's college funds and money as part of a recent refinance and I hope that I can preserve that through this process once the divorce has become final.

She is obligated to pay her attorney's fees, unless the judge decides that you are to pay for them.

Do you have an attorney?

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Originally Posted by Justwantfair

She is obligated to pay her attorney's fees, unless the judge decides that you are to pay for them.

Do you have an attorney?

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My spouse does not have an income so the money spent is coming out of our co-mingled money. I will have an attorney shortly but his cost will be quite a lot less due to my employer offsetting the cost. My real concern is conserving my separate cash and just draining the money that we will have to 50/50 divide at the end. I would think I would need to be careful where I am pulling the money to pay these lawyer fees she is incurring.

Do not start new threads as way to add or follow up a thread you already started. Go back to your original thread, scroll towards the bottom. There's a box there. Type there, then click "post quick answer."

My spouse does not have an income so the money spent is coming out of our co-mingled money. I will have an attorney shortly but his cost will be quite a lot less due to my employer offsetting the cost. My real concern is conserving my separate cash and just draining the money that we will have to 50/50 divide at the end. I would think I would need to be careful where I am pulling the money to pay these lawyer fees she is incurring.

If she does not have an income then it maybe that the judge will decide to have attorney's fees paid out of joint assets.

The sooner you have an attorney, the sooner you will know what your obligation for her attorneys fees will be.

I have never heard of an employer offsetting the cost on an Family Law attorney. That sounds like an interesting arrangement you have with your employer.

If she does not have an income then it maybe that the judge will decide to have attorney's fees paid out of joint assets.

The sooner you have an attorney, the sooner you will know what your obligation for her attorneys fees will be.

I have never heard of an employer offsetting the cost on an Family Law attorney. That sounds like an interesting arrangement you have with your employer.

Ok, I think I understand that the money to be paid to her attorney would come out of joint assets. Too bad it could not come out of her side of the divided assets. :) What I mean is that employer offers a Hyatt Legal Plan that I pay $390/year into from my paycheck and they absorb most of costs of the attorney visits.

>THREE Threads Merged<

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Originally Posted by rwtexas

Ok, I think I understand that the money to be paid to her attorney would come out of joint assets. Too bad it could not come out of her side of the divided assets. :) What I mean is that employer offers a Hyatt Legal Plan that I pay $390/year into from my paycheck and they absorb most of costs of the attorney visits.

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If your wife has no income but you do, you are going to wind up paying for part or all of her attorney fees. You say she has paid her attorney out of community property? Okay, here's how it works: let's say she incurs $20,000 in attorney fees and pays them from community funds. The judge might order that you pay $15,000 of her attorney fees and that she is responsible for the rest. Since $20,000 was paid with community money, half of which is yours, you will be credited with having paid $10,000 already. That would leave an additional $5,000 that you would owe (from either your separate property post-separation earnings or other community property out there to be divided).

See how it works?