Family Law

Division of Marital Property in Divorce: Who Gets What?

Divorce courts do not want to divide property for divorcing spouses - in most states, judges prefer that spouses negotiate an agreement themselves. When they can't, the division is usually complicated. The law treats different assets in different ways, and laws vary from state to state.

Community Property States Are 50/50

In the nine community property states, courts divide marital property evenly between spouses when they divorce. If the entire marital estate is worth $500,000, each spouse walks away with property totaling $250,000. Community property includes income and anything purchased with either spouse's earnings.

Equitable Distribution States Are "Fair"

The other 41 states are equitable distribution states. Equitable does not mean equal. It means judges divide property in ways they think are fair. If a judge believes one spouse has a greater need or right to a certain asset, the split of property might be closer to 60/40 than 50/50. Just as in community property states, it doesn't matter which spouse holds title to an asset. If it is purchased or acquired while they are married, courts will divide its value.

Equity in the Property Counts

When property has a lien against it, such as a mortgage, the lien is subtracted first, and the balance of the property's value is divided. In the case of a couple's home, the property might be sold, the mortgage paid off to erase the marital debt, then the cash equity is divided. Sometimes one spouse will keep the home and refinance the existing mortgage for an amount sufficient to pay it off and to pay the other spouse a share of the equity. The spouse not keeping the home would assume responsibility for debts equaling half the mortgage.

Not All Property is Divisible

Spouses' separate property is not divisible in divorce. Separate property includes anything purchased before the marriage or after spouses separate, as well as gifts or inheritances given to only one of them. In the case of retirement benefits, contributions made before the marriage or after separation are the separate property of the spouse who earned them.

Business Assets Are Treated Differently

Some couples choose to continue a business relationship after divorce - sharing the business income and liabilities - particularly if they launched their business together. If one spouse began the business before the marriage, it is usually separate property. However, the other spouse may be entitled to a cash payment equal to a portion of the business' increase in value during the marriage, or additional other property equal to that amount.

A Divorce Lawyer Can Help

The law surrounding divorce and the distribution of property is complicated. Plus, the facts of each case are unique. This article provides a brief, general introduction to the topic. For more detailed, specific information, please contact a divorce lawyer.

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