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.