What to Do About the Mortgage When Getting a Divorce in California

For many families, their house is the most valuable asset, so the question of what happens to the house is extremely important.  The answer can depend on many factors, so this article will give an overview of some of the possibilities and considerations.  If you’d like to understand how the law will impact your specific circumstances, contact  us at the Law Office of David W. Knecht for a consultation.  We have extensive experience in family law and can help you understand how the factors discussed in this article will apply to you, your property and your family. 

  • Determine whether the home is separate or community property.
  • Home purchased prior to marriage, generally separate.  If the home was purchased prior to the marriage by one spouse and no community assets were used to make payments on the home, then it would typically be separate property. This is a general rule and there may be exceptions which are beyond the scope of this article.   
  • Home purchased during marriage, generally community.  If the home was purchased during the marriage, it is likely community property.  In California, the presumption is that property acquired during the marriage is community property and not separate property.
  • Separate property means one spouse will get it, community property means it is a shared asset. If the house is separate property, the owner will get the house.  If the house is community property, the house can be divided between the couple by agreement or court order.   See https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=FAM&sectionNum=2550 and https://codes.findlaw.com/ca/family-code/fam-sect-2581.html

which state that the presumption is that community property is divided equally. 

  • Sell and divide profits.

The most obvious option is to sell the house and divide the profits between the spouses.  This is clean and is often perceived by the parties as equal.  This is a good option when neither spouse can afford the house alone. 

  • Buy out.  

A buy out option is where one spouse pays the other their share of the value of the home and keeps the home.  This can be advantageous if the home if financed with a favorable interest rate, or if the home has special value in terms of sentimental value or location or design that can’t be duplicated by an alternative house. The spouse considering a buy out should weigh various factors such as the mortgage payments, interest, utilities, insurance and maintenance costs. There can be important tax implications to this decision.  For example, if by court order or agreement one spouse pays the mortgage as a form of spousal support, then the spouse paying the mortgage can claim a tax deduction for support payments, and the spouse receiving would need to claim the payments as support income.  Consulting a tax professional or your attorney on the tax consequences of the division of the house is a important step in the divorce process. 

  • Deferred Sale

A court can enter a deferred sale order to benefit their minor children as a way of lessening the impact on the children.  With a deferred sale order, one spouse and the children stay in the home but both own the home jointly for a certain length of time.   (See https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=3800.&lawCode=FAM)

There are many important considerations when contemplating a divorce, and the division of the home is one of the most vital aspects to plan out in advance.  If you are interested in more information about how your home would be divided in a divorce, please contact the Law Office of David W. Knecht, at 707-451-4502.

Getting a Divorce? Here Are The Basics

Today’s article will be a question and answer about divorce basics in California with source material derived from:  https://www.courts.ca.gov/1032.htm

  • Is divorce the only way to end a marriage in California?

No, divorce is the most common way to end the marriage, but annulment and legal separation should not be forgotten.  Legal separation may be the preferred in certain situations, for example, if a party can retain health insurance through the other spouse and continue empl9yer contributions.  In that instance, if neither party was eager for the divorce to be final or to remarry, then legal separation for a time may be more advantageous than divorce. 

  • Is California a no fault state? 

Yes, California is a no fault state.  You do not have to prove a basis for a divorce and can obtain it solely on the basis of irreconcilable differences, which basically means you just don’t get along with each other. 

  • Is it better to be the one that files first?

The party that files is not important from a judicial perspective.  The court doesn’t give any preference to the person who is first to file.  However, taking the initiative to get the case started may be an advantage or a disadvantage for your strategy in your specific case.  That depends on your personal circumstances and objectives.  

  • Can a divorce impact my immigration status? 

A divorce may impact your immigration status, so it is important to get information on your circumstances as soon as possible.  

  • Can a divorce affect my health insurance? 

Yes, if your health insurance is covered under your spouse’s plan, then it’s important to consider your health insurance options before finalizing a divorce.  There are different options for protecting your health coverage, and you’ll want to negotiate the best option for you. 

  • Will a divorce limit relocation plans?

If you will be sharing custody of children, then divorce can affect relocation plans, so this is a vital consideration in the process if you are planning a significant move.  

  • Where can I get help with a divorce to make sure I think through all the important concerns?

If you need help with a divorce, please contact the Law Office of David Knecht, at 707-451-4502.  We have extensive experience in family law and have the knowledge and expertise to answer your questions. 

Negotiating a House Buy Out in a Divorce in California

Protecting your assets is one of the most important considerations when getting a divorce, and the home is typically the most valuable asset for most families.  A buyout is when one spouse wants to keep the house and decides to pay the other spouse for their interest.  A buyout might be preferable to one spouse for many reasons:  keeping continuity for the children, if the house is sentimental, to avoid the cost of moving, to avoid paying taxes on a sale of the home, if the house is financed with a good interest rate, etc.  This article will discuss the steps to work through to make a good buy out offer. 

  • Determine who owns the home. 

California courts presume that a home acquired during the marriage is community property, meaning that the home needs to be divided 50/50.  However, the analysis of whether the home is community or separate property can be more complicated than that, for example, if the home was purchased prior to the marriage or if the home was inherited by one spouse.  Although a detailed analysis of these rules is beyond the scope of this article, the first step in the buy out process is to determine whether the home is, in fact, community property.   See https://codes.findlaw.com/ca/family-code/fam-sect-2581.html for the presumption that the home is community property. 

  • Determine the value of the home. 

There are many ways to determine the value of the home.  The most thorough may be to obtain one or more assessments from a licensed property assessor.  The process involved generally includes looking at comparable homes in the area, which are properties with similar square footage, condition and year in the same neighborhood.  However, if the expense of a formal assessment is cost prohibitive, you can also obtain a comparative market analysis from a realtor.  A comparative market analysis (CMA) is an estimate based on recently sold, similar properties in the immediate area.  If you don’t want to pay a professional, you can also do your own research on homes through Zillow or Redfin. 

  • Consider the financing. 

Your buyout offer may require a refinance of the mortgage.  It is often helpful to talk to a lender and find out the rates and cost of the refinance before approaching your ex-spouse with a buyout offer.  This way you have your “ducks in a row” before beginning a negotiation process. 

  • Don’t forget the paperwork. 

Property is transferred through paperwork called a deed.  A commonly used document is a quitclaim deed.  A quitclaim deed transfers whatever interest the grantor has to the other person.  This means that if there are liens or other encumbrances on the property, then those will also be transferred in the quitclaim deed.  This deed will remove the spouse transferring their interest from the title. 

If you need help with a divorce and in particular if you’d like an advocate in the home buyout process, please contact the Law Office of David Knecht, at 707-451-4502.  We have extensive experience in family law. 

The Basics of Divorce and Health Insurance

One of the big worries in divorce can be health insurance.  A study from 2012 estimated that roughly 115,000 American women lose private health insurance annually in the months following divorce and that roughly 65,000 of these women become uninsured.  This article will provide information about health insurance during a divorce, but it is important to discuss your options prior to the finalization of the divorce.  Here at the Law Office of David Knecht, at 707-451-4502, we have extensive experience with family law and can help ensure that we advocate for your health insurance needs.  

  • Before the divorce is final, parties are prevented from changing health insurance beneficiaries. 

When a California divorce is filed, there are immediate restraining orders which prevent the parties from changing the beneficiaries of their health insurance. (See https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=2040.&lawCode=FAM)

  • COBRA option. 

One option for keeping health insurance after the divorce is COBRA.  If your former spouse had insurance through an employer that has at least 20 employees, COBRA lets you stay on that plan for up to 36 months, provided you don’t marry again or enroll in a new plan.  You’ll need to tell the administrator of the health plan within 60 days of your divorce or legal separation that you want to remain on COBRA.  The main potential downside is that it can be expensive because you’ll pay the premiums yourself, without the additional money you are used to from the employer. 

(See https://www.webmd.com/health-insurance/insurance-divorce#:~:text=Also%2C%20in%20order%20to%20get,plan%20of%20your%20ex%2Dspouse.)

  • Legal Separation to Stay on Spouse’s Insurance. 

For some employers, legal separation is not a disqualifying event.  If the parties are not looking to have a final divorce and legal separation is sufficient, then staying on your spouse’s health insurance and keeping the employer contribution to the premiums may be an option for you.  This might be a preferred option if deductibles have been met for the year and the parties anticipate further need for medical care. 

  • Affordable Care Act Insurance.  

Another option after a divorce is insurance options under the Affordable Care Act.  These options can be accessed here: https://www.coveredca.com/.  

  • Individual Health Insurance. 

You can contact an insurance broker to find out what insurance options are available to you as individual health insurance. 

  • Medicare. 

If you meet certain criteria (for example, typically if you are 65 and have contributed via your earned income or your spouse or former spouse contributed), then subject to some restrictions you may qualify for Medicare. 

This article is an overview and does not include all the options and/or restrictions that may apply to you.  For personalized help making sure that your health care needs are considered in the divorce process, contact the Law Office of David Knecht, at 707-451-4502.  We have extensive experience in family law.

Study Finds Nearly Half of Americans Over 55 Still Don’t Have a Will 

Forbes recently reported on a Merrill Lynch study, which delved into the psyche of Americans about their preparation for the future:  “The major takeaway is that nearly half of those over 55 have not yet created a will. To make matters worse, only 18 percent of people in that age range have all of the recommended legacy plan essentials: a will, a health care directive, and durable power of attorney.” https://www.forbes.com/sites/maggiegermano/2019/02/15/despite-their-priorities-nearly-half-of-americans-over-55-still-dont-have-a-will/?sh=116f7e525238) .  


  •  Key insights reveal a desire for estate planning but lack of follow through. 


  • Many people believe they should have their affairs in order by 50. 
  • The overwhelming majority (90% over respondents to the study) were open to discussing end-of-life options with family and friends. 
  • Almost half of respondents over 55 were worried that they lack an advocate to promote their best interest toward the end of their life. 
  • The general sentiment from respondents was a desire to avoid being a burden to loved ones. 
  • More than half of respondents admitted that their lack of effective planning could leave difficult problems, confusion, and emotional pain for their families. 


  • Confusion about where to start is a main barrier for estate planning.


The study reported that one of the most difficult barriers holding people back from being prepared is confusion about where to start.  They don’t know what they need or how to get it, so it’s easy to put it off for the future. 


  •  Planning ahead can bring peace of mind to you and loved ones.


The Forbes article reported that an estate plan with a will, healthcare directive and durable power of attorney can be one of the best gifts you give yourself and loved ones.  When you plan ahead to get those three legacy essentials in place, you will feel far more in control and be confident that your family can advocate for your needs. 


  •  How to get started:  Schedule a consult with David Knecht Law.


There is an old adage that the best way to eat an elephant is one bite at a time.  This common sense wisdom applies to estate planning perfectly because the best way to overcome intimidation or reluctance with estate planning is to take the first step.  Call the Law Office of David Knecht, at 707-451-4502, for consultation today, and speak with an attorney who will listen, who is experienced, and who will help you accomplish your estate planning goals. 


Estate Planning:  The Next Normal for Millenials?

The pandemic has brought a seismic shift in culture in a myriad ways, and one recent change is an increased focus on estate planning.  This post shares some ideas from a Yahoo! Finance article which suggests how Millennials can broach the perhaps awkward topic of estate planning with family members.  And for Millenials themselves, recent research published by Trust and Will shows that Millennials (spurred on by Covid-19 concerns) are increasingly focused on creating an estate plan for themselves as well with trends toward creating guardianship plans for their pets and charitable contributions to causes that Millenials care about.  See https://finance.yahoo.com/news/millennials-time-talk-estate-planning-150019404.html and https://www.prnewswire.com/news-releases/first-study-on-millennial-estate-planning-finds-surge-in-wills-due-to-the-pandemic-301221748.html

Get Started on Estate Planning with David Knecht Law Consultation

Whether you need estate planning advice for yourself or loved ones, at David Knecht Law, we are here to guide you and help create the right plan for our needs.  If you are wondering how to bring up the topic with your spouse, parents, or children, here are a few helpful suggestions from “Millenials:  It’s Time to Talk Estate Planning with Your Parents.”  

  1. The “Asking for Advice” approach.

One potential approach for bringing up the perhaps awkward topic of estate planning is the “asking for advice” approach.  For example, if you are married, you could approach your parents and ask how they decided power of attorney or health care proxy.  This could open the topic for further discussion and follow up. 

  1. The “Due Diligence” approach. 

Another method for opening a discussion about estate planning is to make a list of documents that you do have and bring that list to the loved one for discussion to highlight where you are strong and where you need to dedicate more due diligence.  Perhaps some estate planning was completed long ago but needs to be updated or perhaps you have yet to begin.  An organized and methodical discussion may be appropriate to spur action. 

  1. The “Direct” approach.

The direct approach may be the most effective for some loved ones, where you begin by sharing your concerns with the goal to persuade but not bulldoze.  Here, and offer to set up a consultation with an attorney may be well-received, as you would be taking the initiative to set it up but allow the loved one to ask questions and consider the information presented by the professional before they have to decide whether to move forward with establishing an estate plan. 

Regardless of how you present the estate plan idea to loved ones, the Law Office of David Knecht, at 707-451-4502, is here to provide accurate information in a respectful manner.  Give us a call today for a consultation on how to create the right estate plan for you. 


Living Trust Basics: Part 2

According to an op-ed article posted at CNBC.com, the pandemic has inspired a rise in estate planning. In a survey conducted for LegalZoom.com, 32% of young people ages 18 to 34 said they created a will because of Covid -19.  The LegalZoom survey found that 62% of Americans don’t have a will, and those who do, 12% created them in the past 12 months.  The reasons for why many Americans have not followed through with estate planning are many and varied:  for some, they may mistakenly believe they don’t have enough assets to justify estate planning, or for others they may erroneously think that they are too young to worry about.  However, one of the most common reasons for delaying estate planning is a general feeling of helplessness by being overwhelmed with what to do and how to get started.  Source:  https://www.cnbc.com/2020/10/05/op-ed-more-people-are-creating-wills-amid-the-pandemic.html

Get Started on Estate Planning with David Knecht Law Consultation

At David Knecht Law, we have extensive experience in estate planning.  We can meet with you, understand your objectives, analyze your assets and liabilities, and help you establish a plan that is tailored to you and your family.  

We also publish articles to help you understand estate planning, and today we will discuss part two, with a sequel to our first article about Living Trust Basics.  (Source: https://www.scscourt.org/self_help/probate/medical/living_trust.shtml

  1. What is a Living Trust?

A Living Trust is a legal tool for financial planning that allows a person (Trustee) to hold another person’s (Settlor’s) property for the benefit of someone else (Beneficiary). Unlike a testamentary trust, a Living Trust goes into effect during the settlor’s lifetime.

  1. Does a Living Trust have tax benefits?

Yes, a Living Trust may have tax benefits, depending on your specific situation and the type of Living Trust you use.  Several kinds of Living Tursts let you avoid, reduce or postpone federal estate taxes. 

  1. How much of my property is exempt from estate tax?

The federal estate tax is based on the gross value of the property you own or control at the time of your death, over a certain amount.  Taxable property includes property in a trust that is revocable by you or over which you have excessive rights to use the property in it for your benefit, property in your name, funds from IRA’s, retirement benefits or life insurance and property held in joint tenancy.  The tax rate depends on the year of your death. 

  1. What happens if I die or become incompetent?

With most Living Trusts, someone else, like a trusted friend, relative, or a professional trustee, will take over as trustee when you die or become incompetent.   At that point, the trustee has certain legal duties, which can include managing or investing your property, spending trust assets on your behalf (if you are still alive), and paying all your debts and distributing or managing all trust assets according to your instructions when you die.  

  1. Are all the assets distributed immediately?

Not necessarily.  Sometimes the terms of the trust will direct the trustee not to distribute the assets right away.  The beneficiaries may be children or considered too young to handle their inheritance.  The successor trustee does not need to ask the court to get involved and will typically need only the trust document and death certificate. 

  1. With a Living Trust, do I still need a Will?

Yes, it’s typically a good idea to have a Will in conjunction with a Living Trust for any new property that is acquired after the trust is created and for a guardian if you have young children.  You should sign a “Pourover Will” along with your Living Trust. The Pourover Will is a back-up for any property that might not have been properly transferred to the Living Trust during the settlor’s lifetime.  Without a Pourover Will, any property acquired after you set up your Living Trust that inadvertently is listed in your name rather than in the name of your trust would normally pass to your heirs as determined under State law, who may or may not be the same people that you name in your trust to receive your assets at your death. The Pourover Will will ensure that any such assets will be added to your trust so that they will be ultimately distributed to the beneficiaries you name in your trust.  If you have minor children, you can use your Will to establish a guardian for your children if both you and the other parent die. 

If you are interested in more information about how a Living Trust may be a useful tool for your estate planning, please contact the Law Office of David Knecht, at 707-451-4502.


Living Trust Basics: Part 1

If the COVID-19 pandemic has you thinking about the importance of estate planning, you are not alone.  In a study reported at https://www.caring.com/caregivers/estate-planning/wills-survey#the-importance-of-estate-planning, the results showed that more than 60% of respondents believed that estate planning is important, but unfortunately less than 25% of those that responded actually had a will set up.  Perhaps the reason why so many people haven’t followed through on their estate planning goals is a lack of knowledge about the tools and resources that are available.  At David Knecht Law, we have extensive experience in estate planning.  We can meet with you, understand your objectives, analyze your assets and liabilities, and help you establish a plan that is tailored to you and your family.  

This article will help you understand one estate planning tool, which is a living trust. (source: https://www.scscourt.org/self_help/probate/medical/living_trust.shtml)

  1. What is a Living Trust?

A Living Trust is a legal tool for financial planning that allows a person (Trustee) to hold another person’s (Settlor’s) property for the benefit of someone else (Beneficiary). Unlike a testamentary trust, a Living Trust goes into effect during the settlor’s lifetime.

  1. Can you keep full control over the property once a trust is set up?  

Yes, you can keep full control over the property and have the right to use and spend that property as if it had never been put into trust.  In most cases, the settlor, trustee, and beneficiary are the same person (at least until that person dies or becomes incompetent). In other words, if you set up a Living Trust, you can be the settlor, the trustee and the beneficiary of the trust.

  1. What are some of the potential advantages of a Living Trust?

Some of the advantages of a living trust are:

  • You avoid probate – If all your property is in trust wen you die or become incompetent, then legally you don’t own anything in your name, so you can avoid probate, which is the formal court administration of a decedent’s estate. 
  • Tax planning – a Living Trust may help avoid or reduce estate taxes, gift taxes and income taxes.
  • Control – a Living Trust lets you decide what will happen to your property after death. 
  • Protection Against Beneficiary Creditors – sometimes trusts can protect assets received by the beneficiaries from their creditors
  • Privacy – a trust is not a public record, so the general public who is not a beneficiary does not have a right to know about the assets in your trust.  However, when you die, all the named beneficiaries and successors at law have a right to a copy of your trust. 

If you are interested in more information about how a Living Trust may be a useful tool for your estate planning, please contact the Law Office of David Knecht, at 707-451-4502.


First Steps in Dealing with the Estate when Someone Dies

When a person passes, the family and friends left behind will often wonder what to do.  This article will provide an overview of how to deal with the estate.  Source: https://www.courts.ca.gov/8865.htm.  It isn’t uncommon for people to feel completely overwhelmed with the task of figuring out the estate when they are already overcome with grief and pain from the passing, so feel free to reach out to the Law Office of David Knecht for a consultation on how we can help you through this difficult time. 


  • Find out who will be the estate representative. 


The first step is to find out who will be the estate representative.  If there is a will, then the person named as executor in the will is the representative.  If there is no will, there are two possibilities:  Under certain conditions, the estate can pass through simplified procedures informally, and under other conditions, the case has to go through a formal probate court case where the court appoints an administrator. 


  • The estate representative should start gathering information and fulfilling duties. 


The role of the estate representative is to  are many important steps the estate representative is to take care of the estate and make sure it is distributed correctly.  This can include many steps, a few examples of which are as follows:  Get certified copies of the death certificate, find the will, collect and safeguard assets such as bank account funds, life insurance proceeds, veteran’s benefits, Social Security death and survivor benefit, real property (homes, cabins), collect the mail and any important papers, cancel credit cards and subscriptions, and manage digital assets (like a social media profile), notify the Franchise Tax Board, notify the Social Security Administration if the decedent was receiving monthly social security, prepare the decedent’s final income tax returns.  It’s a challenging task to identify and manage all of the duties involved. 


  • Identify the heirs and beneficiaries. 

Identifying the heirs and beneficiaries can be challenging.  It is usually decided by the terms of a will (if there is one), by state law if there is no will or if there is a problem with the will, or by other estate planning documents like beneficiary designations, living trusts or join tenancy arrangements.  There can be problems with a will.  For example, if a will is out of date, and a beneficiary has already died.  Many people find that an attorney can provide assistance in this key step of identifying heirs and beneficiaries. 


  • Inventory the property of the person who has died.

Make a list of assets and debts, which includes real property like a home or a farm, and personal which can be tangible property like cars, furniture, etc or intangible property, like stocks and bonds.  Find out how it is owned and the value of the property or debt on the date of death.  Consider whether the property is shared with perhaps a spouse or a business partner. 


  • Determine the best transfer process. 


When you’ve made your list of all the property, to whom it should be transferred, and what the value of it is, then final step is to determine the procedure for transfer.  There may be simplified procedures available or it may have to be done formally in probate court. 


Death is difficult, and the legal process for handling the estate can be confusing and stressful to deal with on your own. The Law Office of David Knecht, at 707-451-4502, can help you navigate the sometimes complex and confusing steps in settling the estate when someone dies.  Contact us today. 


Can You Use Simplified Procedures to Transfer an Estate?

When a loved one passes and you face the task of settling their legal and financial affairs, you may be wondering if you need to go to probate court to obtain title to the property.  The answer to this question can be complex and depends on a variety of factors such as the amount of money involved, the type of property and who is claiming the property.

Did the decedent designate a beneficiary? 


If the person who passed (called a decedent), named on or more beneficiaries to receive the asset, then a simplified procedure may be used to transfer the property.  Common examples of this situation would be life insurance proceeds, retirement accounts, pensions, annuities, bank accounts, stock accounts or property in a living trust. 

How was the property owned?


Another important factor is looking at the type of title ownership, or in other words, how the property was owned.  For example, was the property owned in a joint tenancy such that the surviving owner gets the entire property?  Was the property community property with the right of survivorship, such that the surviving spouse or partner would likely get the entire asset

Was the property community property?


The community property analysis may not be as simple, however.  An example is if the asset appears to community property without an explicit right of survivorship and whether a will designating that the property be divided in other ways.  It’s important in community property situations to ensure that the property was not somehow changed to separate property through agreement or otherwise. 

What type of benefit is involved?


Certain types of benefits can usually be collected without probate court.  These include benefits such as social security survivor benefits or benefits as a dependent of a deceased veteran. 

Find Answers to Your Questions

California Courts have publicly available resources explaining the probate process at https://www.courts.ca.gov, but these resources are often insufficient to answer every question.  Contact the Law Office of David Knecht, at 707-451-4502. We have extensive experience and can help make this process easier to navigate.