Now it is time to work on a Net Worth Statement, which is a detailed balance sheet of your assets and debts. There is a balance sheet worksheet in the next section which will help you.
To start, you need to know what assets and debts you have. In California, your assets and debts are characterized as “community property,” “quasi-community property,” or “separate property.” Let’s take a brief look at each of these.
These are the assets and the debts that you acquired from the time you married or registered your domestic partnership until the date that you separated. Because California is a community property state, you each own one-half of the community property assets, and each of you is responsible for one-half of the community debt after you separate.
Quasi-community property is property acquired during the marriage or domestic partnership while living outside of California. It includes any earnings, real estate, or any other kind of property. Because they were acquired during the relationship, under California law, they are treated just like community property.
You might also have “separate property.” This is anything you bought or any debts you had before the date of your marriage or domestic partnership. It is also property or debt that you acquired after you separated. By law, these are not split with your partner.
You can also acquire separate property during your marriage or partnership. For example, an inheritance received during the relationship is considered your separate property, along with any gifts you received, and rents, profits, or other money you earn from a separate property asset. Any property you buy with separate property is also your separate property.
We will be looking at the division of property later in section 4 of the course. For now, it’s important just to list the value of the community and quasi-community property assets. Estimate the current market value of the asset and include only the net value. For example, if the market value of your house is $500,000 and the mortgage is $200,000, the net value is $300,000. If you purchased the car for $30,000 and it is only worth $8,000 today, use the current value.
Once you have listed all of your assets, list all of your community and quasi-community property debt. These are your liabilities. List the total value of the debt – not just the amount that must be paid this month or this year.
Once you are done, add up the value of all your community and quasi-community property assets and all your debts. Then subtract your debts from your assets. The difference is your net worth. If you have more assets than debts, you have a positive net worth.
Use the worksheet in the next section to complete the Net Worth Statement now.