To determine whether a leased vehicle is considered an asset in the marital estate, your San Diego divorce attorney must decide if the subject lease is a “true lease” or a “lease purchase.” Generally, true leases are excluded from the marital estate, whereas lease purchases are treated like any vehicle purchased by making a down payment and subsequent periodic payments.
The distinguishing feature of a true lease is the intent of the parties for the vehicle to return to the owner (lessor) at the end of the lease term. A lease is probably a true lease if it requires a relatively large final buyout payment for the lessee to obtain title to the vehicle. For instance, if a lease requires monthly payments of $300.00, but the final payment to obtain title is $3,000.00, the lease is probably a true lease in which the parties did not initially intend for title to change hands. True leases are typically excluded from the marital estate because the asset value (ability to use the vehicle) is offset by the liability (obligation to make payments).
The distinguishing feature of a lease purchase is the intent of the parties for title of the vehicle to change hands at the end of the lease. A lease purchase, unlike a true lease, usually requires a relatively small final payment (maybe as low as $10.00) to obtain title. Lease purchases are considered in the marital estate because the asset value is not completely offset by the obligation to make payments. To determine the value of a vehicle obtained through a lease purchase, the asset value is balanced against the liability – the total remaining lease payments plus the buyout provision at the end of the lease.If you need professional assistance obtaining a divorce, please contact attorney Zonder Family Law to arrange your initial Strategy Session.