How is property divided in a divorce?
Mitchell Allen is the founder and CEO of the Debt Education Certification Foundation, an organization that provides credit counseling certificates and debtor education courses for those who are filing for bankruptcy. He’s also the founder of legal services marketing agency LeadRival. He’s the author of numerous books on debt and bankruptcy.
Mitchell is not an attorney and his answers should not be considered legal advice. Please consult with an attorney about your legal situation. Full Bio
How is property divided in a divorce?
Couples who decide to divorce often want to prepare themselves for this legal process as thoroughly as possible. Along with retaining legal counsel, many people also contemplate how their property should be divided between them and their spouse.
When it comes to dividing property, courts in most states take several aspects into consideration before granting a final divorce decree. Knowing these aspects can help divorcing couples prepare themselves financially and also protect assets that otherwise would be lost in the legal process.
Many people come into a marriage with property that belongs exclusively to them. Stocks, bank accounts, insurance policies, jewelry and more that are brought into a marriage are considered in a divorce to be separate property. If a person keeps their premarital assets in separate accounts and does not comingle them with marital assets, they usually get to keep the money, jewelry, investments and other property without having to share it with the spouse.
However, if a person inherits cash, for example, and comingles it with a spouse's funds in a joint bank account, that person could risk having that inheritance relabeled as marital property and lose a portion of it to the soon-to-be ex-spouse.
Many couples buy a house, cars and other assets as they build a life together. Along with buying property, they also open bank accounts and invest money for retirement. Any property that was gained during the marriage is considered to be marital assets and is typically divided equally between both spouses.
Some property, such as stocks and bonds, may need to be sold in order to ensure its fair distribution. Because married couples are considered to be one entity in the eyes of the law, their marital property is therefore considered to belong to both of them fairly. When they divorce, they must divide it equally.
However, sometimes the court takes another important element into consideration when distributing a couple’s property. When it comes to deciding who gets the house and car, for example, a judge may be inclined to award those assets to the person who will retain primary custody of the couple’s children.
Most judges want the children to be cared for in the same manner to which they are currently accustomed. This consideration includes keeping kids in the family home and providing them with transportation using the family vehicle.
Getting Legal Help
It is often a sensible decision to hire an attorney if there is a risk of your spouse being vindictive or dishonest. In cases such as this, you will need legal help to protect your assets and best interests.
It’s also a good idea to involve a lawyer if your spouse has hired one, especially if the combined financial issues are difficult. Facing a professional attorney without one on your side may be difficult and intimidating, and could affect the outcome of your case.
Understanding how property is divided can help couples prepare for their divorce. They can protect their finances and retain important assets with this information.
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- Laura Wasser
Once you do embark upon the separation or divorce process, it is very important to remember three key things: Be kind, be reasonable, be brief. Remember that this person will no longer be your spouse, but he or she will continue to be your co-parent, family member, and perhaps business partner in certain assets or entities.