Property Division
There is no magical formula for dividing
property acquired by the parties during
their marriage. Generally speaking, courts
treat any property owned or acquired
during the marriage as a marital asset.
Therefore, the parties must reach an
agreement on how to divide that asset,
or else ask the court to make that decision
for them.
You should first determine
what property division procedure applies
in your state. In most states, the court
applies an equitable distribution law,
which requires the judge to effectuate
a fair and equitable division of property
between the parties, which may or may
not be a 50/50 split. In other states,
primarily in the West and Southwest,
the courts may apply a community property
law. Some jurisdictions also abide by
a title procedure, which conveys property
to the title holder.
In equitable distribution states, a
party can generally assume that he or
she is entitled to fifty percent of the
real estate, personal property, bank
accounts, retirement funds, and other
assets acquired during the marriage.
However, this is not a hard-and-fast
rule. Depending on how much has been
awarded in alimony and child support,
and what other personal and financial
circumstances exist; a court may award
a greater or lesser portion of the property
to one spouse or the other. There are
very complicated rules for dividing pensions
and retirement benefits, and for splitting
stock options and other employment benefits.
Similarly, there are many complicated
rules for dividing real estate and other
property that may have been acquired
by one of the parties prior to the marriage,
but which may have increased in value
during the marriage. A party may have
an “equitable” interest in
property, even if she does not own the
property, and even if her name appears
nowhere on the title.
Parties getting divorced must be careful
when they incur debt or purchase property
after separating. In some states, any
action taken after the date of separation
will be attributable only to the spouse
taking the action. In such states, if
a party purchases a car after separating
from his spouse, he will be responsible
alone for the costs associated with the
car. On the other hand, he may not be
required to share the winnings from a
lottery jackpot if he purchases the winning
ticket after separating from his spouse.
In other states, the cutoff date is the
day on which either party files the complaint
for divorce or the petition for dissolution
of marriage. In states which apply this
rule, both parties may be responsible
for debts and obligations as well as
assets and income acquired right up until
the first paper is filed in court, regardless
of whether they separated at an earlier
point in time. Yet another approach is
to treat all assets and liabilities as
being marital until the case is concluded,
and until the judge enters a final judgment
or decree in divorce.
Thus, under this
approach, any property purchased, or
debts incurred, until the parties are
legally divorced would constitute marital
assets or marital debts.
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