4 Issues Surrounding the Division of Marital Property

Do you know what to expect when dividing marital property during divorce?

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Your state will be either an equitable distribution state or a community property state. Once it is determined how marital property is divided in your state, four concerns need to be dealt with.

Dividing marital property can be a complicated process and, in most cases neither party will walk away feeling as if they were treated fairly. Dividing marital property is about being fair and in some cases fair may not feel very fair.

 

 

4 Issues Surrounding the Division of Marital Property During Divorce

 

1. Marital assets owned by you and your spouse will need to be identified.

2. The assets will need to be categorized by whether or not they are marital or non-marital property.

3. A value will have to be assigned to each asset.

4. A plan for  the division of the assets must be established in accordance with your state laws.

Due to no-fault divorce laws, most states separate the division of marital property from any grounds for the divorce. Most states will, however, consider financial misconduct when dividing marital property.

If your spouse has gone through a mid-life crises and foolishly spent money, or has been engaged in an affair and given money to the other man/other woman, then your spouse should expect to be penalized when splitting marital property because the court will view him/her poorly.

For example, if your spouse took the affair partner on expensive trips are gave them expensive gifts paid for with marital assets, your spouse will be held accountable and made to either repay the assets used or, take less at the time assets are divided.

 

If you feel there will be problems with your spouse during the division of marital assets, you should consider separating any joint financial obligations you have before starting the process. Marital property does not only consist of dividing furniture and household items.

Any joint credit accounts, banking accounts and investment accounts you have are considered during the division process also.

The quicker you can set up separate accounts the better. If you are confused about how to go about doing this, ask your attorney for a reference to a certified financial analyst who can help you make sense of a complicated process. 

It may cause feelings of hostility between you and your spouse to begin with but, in the end. you will both be better served.

 

Below are Some Tips to Consider When Dividing Marital Property

 

  • Each spouse should have a complete set of all financial documents in their possession. Your attorney will require a set but, be sure to keep a set of documents for yourself in a safe place.
  • Before beginning the divorce process, if at all possible, establish credit in the name of each spouse and close all joint credit card accounts.
  • Have a formal written agreement, drawn up by an attorney about the activity on any joint credit accounts until all accounts can be separated. If the accounts aren't separated before the divorce process begins, it's imperative that neither spouse is using the account and running up more debt or using marital assets without knowledge of the other spouse. 
  • Open separate bank accounts. Split monthly income in half until it is determined in mediation or court or incoming monthly assets will be divided. 
  • If you maintain a joint bank account, you should have a written agreement regarding the purpose of the account and what the funds will be used for. It’s best to require both signatures on any checks written from the joint account.
  • Freeze any investment assets so that neither spouse may misuse funds.
  • Change the title to your home, if you own a home to include, “tenants in common.” That way ownership of the home will be specifically identified and how much ownership each spouse has can be determine.