Separation and divorce involve a lot of difficult decisions you need to make. And, one such decision is to split assets ethically and legally between both partners.
Besides housing, there are lots of significant assets you need to divide. These include rental property, retirement stocks, brokerage accounts, professional licenses, pension plans, and many more.
To make things easier, it’s important to know how assets are split in a divorce. And, we’re here to guide and help you.
So, let’s get started:
How Does Court Divide Marital Property and Debt?
Based on the law outlined by the respective state, the court uses one of two standard approaches to divide the property and debt:
The following states are community property states in the USA:
- New Mexico
As per the law, a judge classifies all marital property as separate property or community property. The judge splits community property equally between spouses. Each spouse keeps any separate property.
Community property includes the following:
- Income earned by either spouse during the wedding period.
- All items are bought with money earned by either spouse during the marriage.
- Separate property mixed with community property in a way that it can’t be divided.
- All debts incurred during the wedding, even when only one spouse signed the debt paperwork.
Separate property includes the following:
- Money, inheritances, and/or property held by one spouse before the wedding
- Gifts to only one spouse during the wedding
- Personal injury awards to one spouse during the wedding
- Pension proceeds that vested before the wedding
- property bought with separate funds
- Business(s) owned by one spouse before wedding
- Commingled separate property mixed with community property during the wedding
As per this law, judges divide all assets and money earned during marriage fairly but not necessarily equally.
Property split doesn’t always mean a physical division. The court may award each spouse a specific percentage of the total value of assets. Each spouse gets personal property, debts, and assets whose worth adds up to a fair percentage. It’s better to speak with an experienced and reputed lawyer who can make things easier for you.
Important Factors Considered During Assets Split
- Length of wedding
- Property or income bought by each spouse
- Lifestyle standards established during the wedding
- Age and physical/mental health of each spouse
- The financial situation of each spouse while finalizing the divorce.
- A spouse’s contribution to the education, earning power, and training of the other.
- Needs of custodial parent for maintaining the health and lifestyle of children
A court can also take into account any other considerations that it believes are significant. This makes predicting the outcome extremely difficult, if not impossible.
The mainline is that you should avoid going to court if at all feasible. That’s because of a specific reason why more than 95% of all divorces are settled without going to court.
Who Gets the House During a Divorce?
The conditions determine which spouse stays in the family home. Although judges will check to see who owns the house, the title name is not always the deciding factor in who stays in the family home.
- If you don’t have kids and the house is in one spouse’s name, the owner normally keeps the house. The owner has the legal right to order the other to leave it if you occupy a community property state. However, in all jurisdictions, if a spouse’s name isn’t on the deed, one can establish that shared funds were used to pay for the house.
- If the home was purchased during the wedding, neither spouse usually has a stronger claim to the property than the other. One partner can ask the other to go, but neither spouse can make the other go.
While the divorce is proceeding, either spouse can approach the court for a temporary order determining who is allowed to live in the home. If the partners can’t agree on who keeps the house, the judge will determine how it will be divided.