Dividing Assets in a Divorce
The big question hanging over the end of a marriage is who gets what? From a legal standpoint marriage is seen to be an equal partnership, with each spouse’s contributions considered to be equal regardless of whatever circumstances or data can be shown to state otherwise. Even if one person is the sole earner of the households’ income, and the other did not contribute directly to that in any way, their role in the marriage is still considered to have been of equal value. It is because of this that when it comes to dividing assets in a divorce everything is acquired during the marriage is to be divided as equally as possible.
Generally speaking any property that you had prior to the marriage is yours to keep, but if it increased in value during the marriage (stock options, real estate, etc.) then any increase in value is to be divided evenly between each of you. Depending on where you live this attempt to divide assets (and debts) evenly between each spouse is accomplished through one of two systems.
- Community Property States,
- Equitable Distribution (also known as Common Law) States.
Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin are all Community Property States. In these states both spouses are considered equal owners of all property accumulated during the marriage. This is everything from table cloths to cars and houses. It does not matter which individual purchased the item, it is both of yours and thus is to be divided equally among you.
Under this system the division of assets and debt is decided independently from decisions regarding alimony and child support. To decide on those issues Judges will take into account numerous factors such as the employment prospects of each spouse and who was the primary caregiver to the children.
Community Property states are known to have rather generous alimony laws and most divorces you hear about that result in significant and sometimes shocking alimony settlements are community property states. This is not always the case though, as the overall culture of the State also influences how the court interprets and enforces the law.
The remaining forty-one states are Equitable Distribution States. In this case if your name appears on an asset, such as the lease of your car or the deed of your home, it is recognized as yours. Your spouse will still have the right to claim a portion of those assets, how they are divided is then decided based on a number of factors:
- The length of the marriage
- The “Standard of Living” that was consistent during the marriage.
- The perceived value of home-making or child-care provided by the non-bread winner of the family.
- The future earning power of each party (based on education, skill, and experience)
Debt that has been accumulated during a marriage is divided within the same processes that each state divides assets and the same factors come into play, only this time the focus will be on whom most benefited from the debt (such as a loan) and who will be most able to pay off the debt.
Regional Differences
Alaska
Considered an “opt-in” community property state, which means that you have the option of making your property community property or not, this gives married couples the ability to decide on which system seems the most fair to them.
Canada
Canada has a system very similar to that of community property, during marriage in Canada all property is considered separate but in the event of divorce it is all placed together as joint-property and then divided. The thinking behind this is that it allows you full independent control of your earnings during marriage but keeps a person from being taken advantage of in divorce if they spent the marriage not-working (and would thus not own anything in the event of divorce).
England and Wales
In England and Wales there is no official community property during marriage or after divorce. The courts have full discretion on mandating separation of property or a financial exchange between parties with what is referred to as ancillary relief.
Scotland
Scotland has a general rule that marriage does not affect ownership of property, this rule has been modified in recent years to give an ex-spouse the right to occupancy in the matrimonial home, even when it is owned by the other spouse, as well as a general principal of fair-sharing which, again, leads courts to divide property as evenly as possible. You’ll notice that with a lot of these differences it more comes down to the wording of the law than it does the actual result – the average divorce experience between western nations tends to feel about the same.
In nearly all cases each of these systems will lead to some form of division of property and usually an attempt by the courts to have it divided evenly. While Community Property States may be more cut and dry about the division, being the bread-winner in a long-standing marriage of ten or more years in a Common Law State can lead to you being considered responsible for far more than 50%.
What is divided: In Community Property States everything is divided evenly. In Equitable Distribution States anything that is held in both of your names, such as a joint bank account or if both of you own the house together will potentially be split evenly.
In the event that one of you continues to own the house, then the other is to be paid half the value of the home.
If you would like to be the one who gets the house: DO NOT MOVE OUT during the divorce proceedings. It is very common, and often expected, that the man is to move out while the divorce happens. If at all possible you need to stay in your home. Sleep on the sofa if you have to but maintaining residency in the home is important, possession is 9/10s of the law and if by the time the divorce is nearing conclusion you haven’t lived there for months it is highly unlikely that the idea of the house being yours will even cross the judge’s mind, even if you’re the one paying the bills every month.
There are other reasons to stay at home, particularly if you have children you should be doing your absolute best to stay in their lives. Get information on that aspect of divorce by looking over our Child Custody Help.
