When a married couple decides to file for divorce, one of the main legal concerns is always the division of assets between the parties. Assets can refer to cash, property, real or personal, and anything with monetary value. Assets can be divided in many ways. If the divorce is amicable (uncontested divorce), couples may come to an agreement on how the assets are divided. This is often the best option as it can save both parties money by reducing court costs and attorney’s fees. Mediation is often an effective tool in helping couples agree on fair asset division.
If the couple cannot come to an agreement on a fair division of marital assets (contested divorce), the issue will be resolved by the court during a formal divorce proceeding. Since the laws governing the division of marital assets vary greatly from state to state, it is important to consult a local divorce attorney to advise you in any divorce proceeding.
Marital vs. Separate Property?
During a divorce proceeding, property is either considered marital property (a.k.a. community property) or separate property. It is important to understand how property will be categorized, because under most circumstances, only marital property is subject to division during divorce.
Marital Property: Generally, marital property includes all assets acquired during your marriage unless there is an agreement stating otherwise. These assets can include anything from wages put in a joint checking account, the family home, household vehicles, furniture, etc.
Separate Property: Separate property includes assets that are obtained by one spouse outside of the marriage (usually before or after the marriage or sometimes during the marriage under certain exceptions). Some possible examples of separate property include:
- 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 (pre-nuptial and post-nuptial agreements);
- 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).
Note: Even if an asset begins as separate property, it can become marital property if it is mixed with community property (commingling property). For example, if one spouse inherits a house from a relative and then uses marital funds to remodel the kitchen.
Will I Be Responsible for My Spouses Student Loans?
During the divorce proceeding, the court divides both the assets and the debts of the marriage “fairly” between the two spouses. 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. If the student loans were taken out before marriage, then the spouse who took out the loan will likely be responsible for the whole debt.
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. However, if the business grows in value during the marriage, the added value may be considered marital property.
Do I Need a Lawyer for Help with Divorce Assets?
Filing for divorce typically requires the assistance of a qualified divorce lawyer. An experienced attorney can help you with issues of property characterization and the division of assets. Your attorney will be able to notify you of the property you should be entitled to under local law and advocate for you in court.