Asset and Debt Distribution in Divorce – The Importance of Tracing
The role of the Court in a divorce or separation action is to equitably divide assets and debts, whether community or separate. Evidence is paramount in proving the value of those properties so the Court understands what there is to divide and so that it may be equitably distributed.
“Tracing” is the process of showing how an asset or debt acquired its value. For example, if the evidence proves there is an existing bank account worth $50,000 and a vehicle worth $50,000 both in the other party’s name, you will need to show the Court proof of the value and proof of origin. This is integral to characterization and equitable division.
In the above example, if the evidence shows that the other party received a $100,000 inheritance, then used $50,000 to purchase a vehicle and deposited the remainder into a new bank account, you have shown both the characterization and the value of those assets.
Tracing is also important to avoid double or triple counting an asset. In the above example, while it could appear the Court has $200,000 worth of assets to divide, that is simply not the case. The Court has $100,000 in assets to distribute because the evidence proved the inheritance was converted into two separate assets, not two additional assets.
Information gathering is an invaluable step in the dissolution process and necessary to ensure an equitable distribution of all property.
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Beresford Booth lawyers are experienced, dedicated professionals, prepared to answer your questions and guide you through the process based on your needs and goals. As a result of our experience, we provide you practical advice and set reasonable expectations for the process. Together, we develop and implement a case strategy based on your goals. Beresford Booth is a Primerus law firm. Primerus is an international society of top-rated independent law firms.
Family law disputes can be stressful and emotional. Our family law group can take some of the weight off your shoulders. To request a consultation, please contact Beresford Booth at info@beresfordlaw.com or by phone at (425) 776-4100.
