2Q-Solution
Going through a divorce can already be overwhelming. The kind of emotional state you’re in during a divorce can often make you oblivious to the important processes you need to be aware of. One of those crucial processes is property and asset division.
Understanding how family law divides your property and assets during divorce, with proper legal guidance, you can reach a fair resolution that is beneficial to both you and your ex-partner. Finding a good family law firm, like Boyd Law, can guide you with professional assistance through the property and asset division process.
Handling Marital Property vs. Separate Property
Separate property
Any asset or property acquired before marriage, gifts personally given to one spouse, and any asset inherited from a relative during the time of marriage will be counted as separate (non-marital) property. Property acquired in exchange for a separate property will also count as a separate property.
However, if you mix your separate property with marital property, such as by using your separate funds to invest in marital property, the situation can become complicated. If you were compensated for your personal injuries during the time of marriage, the compensatory amount can be counted as separate property unless it was for your lost wages.
Marital property
Any property bought or acquired during the time of marriage and before the time of separation is counted as marital property, such as investments, homes, joint bank accounts, cars, total income, and funds.
These will be taken into account when the properties are divided. In case you had a written agreement with your spouse that a certain property or asset is deemed separate property, it won’t be distributed during the division.
Understanding Equitable Distribution vs. Community Property
Community property law
Under this law, all of the couple’s joint assets will be split evenly regardless of the individual’s earnings and contributions to the assets, excluding the separate assets. In this system, one spouse may be susceptible to more advantages and benefits in some cases.
Only a handful of states, like Texas, Washington, and California, follow this law, called “community property.”
Equitable distribution law
Equitable distribution divides all assets of the couple equitably, making a fair division, but not necessarily equal. This law makes sure that each unique divorce case has a fair settlement and does not favor or benefit one spouse more than the other.
Factors like the length of the marriage, earning potential of both spouses, and contribution to the marriage (both financial and non-financial), like if one spouse left their career and job to focus on the family, will play into how assets can be divided equitably. Most states follow the equitable distribution system.
Understanding the impact of debt
Debts and liabilities will be taken into account during property and asset division as well. Any form of debt made during marriage, like loans, credit card balances, and mortgages. However, if one spouse incurred a debt without the other spouse’s knowledge for their sole benefit, it may not be divisible.
Consult a family law attorney to manage debts and liabilities. They can help you create a plan that identifies who is responsible for each debt, potentially exempting you from payment.
Key takeaways
1. Dividing property can involve two ways. Either marital or separate property law can be applied, depending on the state.
2. Properties acquired before marriage, gifts, and inheritance are counted as separate property, while properties acquired during the time of marriage are counted as marital property.
3. Community property law divides assets equally, while the equal distribution system divides assets equitably, ensuring fairness.
4. Debts and liabilities can also be equally divided just like assets.
