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What Are Divorce Assets?
In a divorce proceeding, one of the main tasks is to determine how property and money are to be distributed between the parties. “Divorce assets” refers to property that will be addressed and handled through the divorce process.
What Are the Types of Property Classifications?
There are two types of property: marital property and separate property.
Marital Property: Marital property is everything that acquired during your marriage unless you have a different agreement stating otherwise.. For example, money you earned through employment and placing it in a joint checking account and using that money to pay for household bills would be considered marital property,
Separate Property: Separate property is money that one spouse earned before or after marriage. There are some differences in how separate property is defined in different states, but the same general rules apply. Some types of separate property are:
- Property one spouse owned before entering the marriage
- Gifts received by one spouse before or during the marriage
- Property acquired during the marriage in one spouse's name and never used for the benefit of the other spouse or the marriage
- Inheritances received before or during the marriage
- Property that the spouses agree in writing is separate, as long as the writing meets your state's standards for that type of agreement (called either a transmutation agreement or a post-nuptial agreement)
- Property acquired by one spouse using separate property assets with the intention of keeping it separate, and
- Certain personal injury awards (in general, the portion of the award that repays you for lost earnings is marital property, while any award for pain and suffering is separate)
What If There Is a Dispute over Assets in a Divorce?
Disputes over assets commonly occur in a divorce lawsuit. Disputes can often revolve around assets such as:
- The marriage home
- Cars, boats, or other vehicles
- Securities such as stocks and bonds
- Money being held in a joint account (commingling property such that it is hard to tell who owns which parts)
- Debts owed jointly by the parties
Disputes over assets usually require a court to go back and analyze the asset to see which party owns it, and whether it is being owned jointly. This is called “characterization” of the asset.
After making such determinations, the court will then attempt to assign a figure that each party is entitled to, as well as how much they might owe (if any). As you may be able to tell, this can be a lengthy and complicated process.
Will I Be Responsible for My Spouses Student Loans?
After a divorce, the courts will divide the property of each spouse equally and will also divide the debt of each spouse equally. The courts want to maintain fairness in the process. If there were student loans taken out by either spouse during marriage and both spouses benefited from the education, then both spouses would be responsible for repaying the student loans since t would be considered marital debt. If the student loans were taken out before marriage, than the spouse that took the loans out would be responsible.
What If There Is a Disagreement on the Division of Assets?
Most courts and divorce judges and lawyers want to maintain fairness and want to avoid any disagreements of asset by preventing people from litigation. Going to litigation to resolve a asset dispute costs more money in legal fees than the asset itself. If you and your spouse cannot agree on division of assets, you will need to seek legal help because your property settlement would not be complete until the assets are divided.
The judge can also decide who gets the property if the two of you cannot agree.
Can I Be entitled to Part of My Spouse’s Small Business?
Generally an asset such as a business that was owned by the spouse before marriage is considered separate property of the spouse who started the business.
However, if the business appreciates or goes up in value during the business, the added value would be considered marital property. Some states require more than just appreciation and added value. For example, some non-worker spouses must show proof that they invested in the business through money, labor, or some type of contribution during marriage and then that value of contribution will be divided at divorce.
Do I Need a Lawyer for Help with Divorce Assets?
Filing for divorce typically requires the assistance of a qualified divorce lawyer. You may need to hire a lawyer for help with issues like property characterization and the division of assets. Your attorney will be able to explain how the laws in your area work, as these may be different in each state. Also, your lawyer can provide you with representation during the actual court meetings.
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Last Modified: 10-14-2016 12:47 PM PDT
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