Introduction to Divorce and Dividing Property
Even in the best of situations dividing a family’s property during a divorce can be a real challenge, especially if there are significant assets at stake. During a divorce, it is important to understand which assets will benefit both your short and long-term financial stability, which can be difficult to discern without a thorough understanding of the assets themselves. Therefore we need to discuss the differences between separate and marital property under state laws and why that is critically important to you.
Types of Property
In a nutshell, separate property is everything the spouses own separately and does not need to be divided. States differ in some of the details but generally, this includes anything owned prior to the marriage; anything inherited or gifted by a third party during the marriage; anything earned by either spouse after the date of separation; and the pain and suffering portion of a personal injury judgment. In some cases, separate property can also include anything that one spouse gave to the other in writing. However, separate property can lose its separate legal status if it is mixed with marital property. For instance, if you were to inherit a large sum of money from your parents prior to your marriage it is considered separate property, but if you deposit it into a joint bank account with your spouse, then that property will most likely now be considered marital property.
Marital Property, on the other hand, is all incomes and assets acquired during the marriage regardless of who purchased it and how it is titled. This includes, but is not limited to, everything from 401Ks; stock options; pension plans; bonuses; and commissions to CDs; antiques; and tax refunds. The list goes on. In some states, if one spouses’ separate property increases in value, then that increase is considered marital property.
Different types of State Laws regarding Property Division
Community Property States
It is also important to know if you reside in a Community Property State or an Equitable Distribution State since it affects how your assets will be divided. There are 9 Community Property States (California, Arizona, Idaho, Texas, Louisiana, Washington, Nevada, New Mexico and Wisconsin). These states consider both spouses as equal owners of all the marital property, and it should be divided as a 50-50 split.
Equitable Property States
The other 41 states are Equitable Distribution States. In these states, divorce settlements do not need to be equal but they do need to be fair and equitable. In Equitable Distribution, several factors are taken into consideration, including: the financial situation of both spouses at the end of the marriage; the contribution of the spouse to the education or earning power of the other spouse; the standard of living during the marriage;the needs of the custodial parent to provide for the children; and any other factor the court may consider relevant. All these moving pieces make it very difficult to predict the outcome.
What should you consider before meeting with an attorney?
At the end of the day, going through a divorce is not easy. It can be a completely complicated process with unseen obstacles. While this article gave you a quick overview of property distribution during a divorce, acquiring the correct assets requires a deep analysis. Having a competent divorce lawyer on your team can help you keep the fair share of property you worked so hard to accumulate. It is important to find a lawyer who is both sensitive to the nature of family law and has the experience and knowledge necessary to analyze complex asset holdings. An accomplished financial professional, like a Divorce lawyer in Arlington Heights, or one in your particular location, can work wonders and help you walk away with what you deserve.