Property Division Basics
Where you live will affect how much property you receive in your divorce. There are two approaches to property division: community property and equitable division.
A small group of states follow a community property approach to dividing marital property. In a community property state, a judge will split a couple’s property in half. Each spouse will walk away from the marriage with 50 percent of the debts and 50 percent of the assets. States that follow a community property approach include: Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin, and Puerto Rico.
Hawaii follows the majority as an equitable division state. An equitable division approach is a fair, but not necessarily equal division of marital property. This means you a judge could award you a larger amount of marital debt and smaller portion of assets in an equitable division state. Under an equitable division approach, a judge will try to balance the financial needs of each spouse.
Characterizing Separate Versus Marital Property
Determining whether property is separate or marital is critical in a divorce. Separate property isn’t subject to division in either a community property or equitable division state. Separate property includes gifts, inheritances, or property brought into the marriage by either spouse.
By contrast, marital property is divided during a divorce. Marital property includes property you or your spouse purchased, earned, or accumulated during the marriage. For example, income,a home, cars, lottery winnings, personal injury settlements, and even interest earned on a separate bank account can all be marital property and subject to division during divorce. Additionally, one spouse’s separate property can become joint if it's commingled or mixed with marital property.
How Will a Judge Determine My Property’s Value
Early in your divorce, you should prepare an inventory of all property items owned by you, your spouse, or both of you jointly. You and your spouse can also agree to valuations for each of those items. You can hire an appraiser to help assign a value to any items on which you can’t agree. Specifically, a business valuation expert is essential if you’re planning to sell the family business after your divorce.
What to Expect at a Divorce Trial
You’ll have completed most of the legwork in your case by the time you get to trial. For example, you likely submitted financial disclosures with detailed information about your earnings and monthly expenses including: mortgage/rent, utilities, phone bill, car payments, insurance premiums, medical expenses, and personal care expenses. You may have also submitted copies of your mortgage statements, bank records, loan payments and other financial documents requested by your spouse or the court. This is called the divorce discovery process.
If you hired any experts in your case, you may have also submitted their reports or appraisals. Your financial information is relevant to how a judge will divide property in your divorce, and you should expect to testify about your assets, debts and overall financial situation at trial. Your spouse will also likely testify.
How Will a Judge Divide Property at Trial?
Because Hawaii is an equitable division state, a judge will look at your whole financial picture when deciding how to divide property. In some cases, an equal division of property is the most fair. However, a judge will consider the following before splitting property in your divorce:
- length of marriage
- each spouse’s age and physical and emotional health
- each spouse’s employment history, education, job training and employability
- each spouse’s financial needs, including potential inheritance
- each spouse’s retirement benefits, including pensions, social security or military benefits
- any spousal support
- each spouse’s family obligations including child support obligations or children from another marriage, and
- any other relevant factor.
A judge may also consider any unique family circumstances such as one parent’s responsibilities to care for a severely disabled child. In a situation where one parent cannot work because of caretaking obligations, a judge may award that parent a larger portion of the marital estate to make up for the limits on his or her earning power. Fairness is the overriding goal when it comes to dividing property.