Property Division in a Divorce or Dissolution
In both a Divorce and Dissolution it will be necessary for you and your spouse to come to an agreement or have the court determine how your property will be divided. The two most simple to ask, and hard to answer, questions surrounding the division of property include:
- What property is to be divided and
- How is property to be divided?
Here are some basic guidelines to follow in determining a proper property settlement:
How is Property Divided When Ending a Marriage?
Property is divided “equitably.” Therefore, you should follow this principle of equity when you go into negotiations with your spouse on the issue of property division. Most of the time “equitably” is a straight fifty-fifty split. If you cannot come to an agreement with your spouse then the Court will have to decide how your property will be distributed. The Court must consider many factors in its final determination of division of property, including the most basic:
- What is the Property that is included in a Final Property Agreement/Judgment?
Property encompasses your home, other real estate interests, vehicles, businesses, business equity (if any), retirement accounts (i.e. IRA’s, Roth IRA’s, Pensions, 401K’s), life insurance policies, stock options, bonds, personal property (i.e. furniture, clothing, jewelry, etc), debts, etc. so forth. It is very important that when you are developing a property settlement or are going to court that both you and your spouse provide each other with full disclosure of all assets. One way to ensure this is accomplished is through an asset disclosure list or interrogatories which an attorney prepares.
- The Marital Property v. Separate Property debate
There are instances when the division of property is not as cut and dry as just identifying your assets and liabilities. Sometimes there is disagreement as to whether property is actually “marital property.” Marital property is defined by statute as: property acquired by either spouse during the course of a marriage. So what is "separate property?" Separate property means all real and personal property and any interest in real or personal property that is found by the court to be any of the following:
- Inheritance by one spouse
- Real estate, personal property, or interest acquired by one spouse prior to the marriage
- Passive income/interest acquired from separate property
- Real or personal property excluded through a prenuptial agreement
- Any gift given to one spouse during the marriage (proven through clear evidence to have been given to only one spouse)
It is important to discuss the issue of marital v. separate property with an attorney as there are exceptions to the general rules that are explained above.