Commonly Overlooked Assets in Divorce and Legal Separation

In California divorce, legal separation, and domestic partnership dissolution cases, both parties are legally required to disclose all assets—whether classified as community property, separate property, or a hybrid of both.

Each spouse owes the other a fiduciary duty of good faith and fair dealing, which includes formally disclosing all material facts related to known assets using mandatory Judicial Council forms.

🔍 Why Full Disclosure Matters

The purpose of these disclosures is to determine the size and scope of the community estate. Without full transparency, it’s nearly impossible to divide assets fairly.

When assets are hidden—whether intentionally or accidentally—one party can receive more than their fair share. Although the court maintains jurisdiction over omitted assets, meaning they can still be addressed later, it’s far better to handle everything properly the first time.

⚠️ 5 Commonly Forgotten Assets

Experienced family law attorneys often spot these overlooked assets that can significantly affect the division of property:

1. 🧾 First Post-Separation Paycheck

• Why it matters: Earnings made before separation but paid after may still count as community property.
• Example: If your paycheck arrives after separation but was earned partially beforehand, that portion must be shared.
• Action: Determine the portion earned before separation and divide it accordingly.

2. 🏖️ Paid Time Off (PTO)

• What’s included: Vacation days, personal leave, and other unused paid time off.
• Valuation: Multiply the pay rate at settlement or trial (not at separation) by the unused hours as of the date of separation.
• Outcome: The employee-spouse keeps the PTO and owes an equalization payment to the other spouse.

3. 💳 Credit Card Rewards

• Types: Cash back, points, airline miles, or other loyalty perks.
• Impact: These can be worth thousands of dollars and must be disclosed, valued, and divided.
• Tip: Don’t assume they’re insignificant—track and disclose them properly.

4. 🏡 Mortgage Impound Accounts

• Definition: Accounts that hold funds for property taxes and insurance premiums.
• Why they matter: These accounts may hold thousands of dollars at the time of separation.
• Solution: If one spouse keeps the home, ensure the other receives their share of the impound account balance.

5. 🪙 Overlooked Retirement Accounts

Military Retirement

• Issue: Military pensions are often excluded due to their “all or nothing” nature (requires 20 years of service).
• Even if not yet vested: The community may still have an interest based on service years during the marriage.

CalSTRS – Defined Benefit Supplement (DBS)

• Who it applies to: California educators.
• Common mistake: Parties remember the main CalSTRS pension but forget the DBS account, which can be worth tens of thousands of dollars.
• Action: Identify, value, and divide both the main pension and DBS account.

🎯 The Value of an Experienced Attorney

A detail-oriented family law attorney:

• Helps uncover all community assets
• Prevents missed disclosures that can cost you later
• Maximizes your rightful share of the estate

While hiring a low-cost or self-represented option might save money upfront, failing to find and divide all community property can be far more expensive in the long run.

Don’t leave money on the table. Work with a trusted attorney who knows where to look and how to protect your interests.