When you’re going through a divorce, you may be thinking more about your emotions than your finances, but property division is a huge part of any divorce. It’s important that you know how to categorize your assets and debts as marital or separate property, deciding who is entitled to what and how best to split.
Know the facts about property when getting a divorce
There is frequent disagreement regarding property and it commonly starts with who owns what. To put it as simply as possible, anything the couple accrued while they were married will generally be considered marital property regardless of who was the primary income earner and paid for it. If they purchased a home together, then that will be marital property.
There are items that might have been acquired after the marriage but will not be considered marital property. If a person’s family member died and left them an inheritance, that will not be marital property. Assets they had before the marriage, gifts from one to the other or Social Security benefits will not be marital property and will belong to the person receiving them.
As part of the divorce, it is essential to consider debt. Most will focus on property, but joint debt must be split as well. Joint credit cards and what is owed will be shared between the two. There could be extenuating circumstances where a person accrued significant debt after the parties had separated. The court will need details to consider these circumstances.
Property must be accurately valued when it is divided. This is particularly important in cases where the sides are on reasonably good terms and want to trade one property for another. Perhaps a person wants to remain in the marital home to raise minor children. The other person could allow it if they are given different marital property like bank accounts and investments to close the gap.
The objective is to reach a “fair and equitable” outcome. Some might misinterpret that to mean that it will be split evenly, but that is not the case. The court will look at various factors including how long the couple was married, the value of the property and the financial situations.
Reaching a fair property settlement is possible
In some cases, the sides are on good enough terms that they can negotiate an amicable agreement to split property. In others, it is more complex. As with all areas of family law, it is essential to understand how these matters are decided and the available options. Being protected is key and that should be a priority from the outset.