Division of Property in a Divorce

Division of Property in a Divorce

One of the most crucial aspects of a divorce is division of property. It is also one of the most painful aspects of the end of a marriage. Division of property involves dividing up you and your spouse’s marital assets, which can include your home, vehicles, stocks, retirement funds, and even any debts that you share.

What Is the Difference Between Community and Non-Community Property?

The differences between community and non-community property are obvious for the most part. Community property includes items and debt that belong to both spouses.

Community property, also known as marital property, includes any income during marriage and property acquired with that income. In addition, community property includes debt that the couple incurs during marriage. However, not all debts are considered community property. In some cases, debt incurred by a spouse during marriage is only tied to that spouse and not the other.

Generally, community property could consist of:

• Any money you and your spouse earned or acquired during your marriage, along with anything you used that money to purchase during your marriage
• Any separate property that during your marriage was intertwined with community property to such a degree that it is impossible to separate them

Specific items that are examples of community property include:

• Joint checking accounts
• Houses
• Automobiles
• Boats

Non-community property, also known as separate property, is property that the law considers as only belonging to one spouse. Examples of non-community property include:

• Gifts that are given to just one spouse
• Lawsuit awards or settlements
• Inheritance left to one spouse
• Retirement account that became eligible to be distributed to the account holder prior to marriage
• A third type of property is a combination of separate property and community property.

One example: if funds saved in a separate account established prior to marriage are combined with funds from a joint bank account shared by a married couple, and those funds are used to purchase property. In that case, the property could be considered a mixture of community property and non-community property. Generally, when this occurs, as long as it can be proven that both community funds and separate funds were used to purchase the property, the property is considered community property.

How Does Division of Property Work in a Divorce?

In a divorce, division of property can be decided in a few ways. In some situations, couples can choose to divide up their property themselves without any outside help. This can work well if the couple can remain level-headed enough to come to a fair agreement. However, generally, spouses who are divorcing one another find it difficult to come to a fair agreement on anything without outside help. Therefore, the next best option to divorcing couples dividing up their property themselves is having a mediator help them come to a fair agreement regarding division of property.

If a divorcing couple cannot come to a division of property agreement, then it could be left up to the court. The court uses state law to decide division of property. As such, how division of property works varies from state to state. Generally, if the court decides division of property, it involves:

• Equitable Distribution – This method of division of property is used in states with laws that direct the courts to divide earnings and assets that couples acquire during marriage equitably between the two spouses. Dividing assets and earnings equitably means that the property may not be divided equally, but it will be divided fairly. As such, if one spouse has more separate property than the other, then the spouse with less separate property could be awarded a larger amount of community property to make the division of property equitable.
• Community Property – In states that are not equitable distribution states, division of property is simpler and more straightforward, but may not be as fair. In those states, which are known as community property states, any property of a married person is either classified as separate property or community property. Therefore, when couples get divorced, each spouse keeps his or her separate property, and their community property is divided equally between them.

In some cases, the court may not physically divide a married couple’s property. Instead, the court could award each party in a divorce with an equal percentage of the monetary value of their community property.

Who Gets the House?

Houses are treated a little differently. For spouses with kids, then the parent who spends more time with the children often will get to stay in the house with the kids. If you and your spouse do not have children, then if one of you purchased the home with separate funds, then that person has a right to ask the other spouse to leave the house.

If you bought your home with community funds, then things can become complicated. In this case, neither spouse can kick the other person out of the house. Therefore, if you were to come home and find that your spouse had changed the locks and locked you out, you may have the option to call the police, because he or she has no right to kick you out. If you bought the house with community funds, then the only way you could prevent your spouse from staying in the house is if he or she is a domestic abuser and a court has granted you a restraining order against him or her.

Generally, if a divorcing couple cannot agree on who gets the home, then the court will make a ruling on who gets the house during divorce proceedings. In some cases, you may be able to have the court decide sooner if you request a temporary order.

How Is Debt Divided in a Divorce?

When a marriage ends in divorce, in addition to a couple’s assets being divided up between them, so are their debts. Laws regarding division of debt in a divorce vary from state to state. For the most part, debt is treated similarly to division of property in a divorce. Therefore, if a couple does not decide how to divide their marital debt on their own or with the help of a mediator, then a judge will decide for them. In some cases, if one spouse has more property following a divorce, then that spouse will also be responsible for a higher percentage of debt because of a divorce. However, generally, debts and assets are divided equally between the spouses.

Talk to a Family Law Attorney About Divorce and Separation

If you are even just considering a divorce, you should speak with a family law attorney. You need to know what your options are, what the divorce process will involve, and whether it is right choice for your and your spouse’s situation. In many cases, experienced divorce lawyers will meet with you to discuss your case for free, including examining your situation, answering your questions, and explaining your options.

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