Understanding the Division of Property in Divorce

Posted on June 17, 2011 10:34am
Understanding the Division of Property in Divorce
When a couple decides to divorce, one of their primary tasks is to divide their property (both assets and liabilities).

The division of property can be a complex and contentious issue in a divorce. If both parties agree, they can divide their property through negotiations and submit their agreed division to the court for the court to approve. If both parties cannot agree, the court will have to decide the property division for them.

How does the court divide property?

Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin (as well as Puerto Rico) are community property states. In these states, the court will characterize all property as "community" or "separate." Generally, each spouse keeps his or her separate property (though not always in every state), while community property is divided equitably between the spouses. Most often that means an equal (50/50) division of community property but, again, not always.

In all other states, marital property is divided by equitable distribution-a fair division of property. This does not necessarily mean equal division, and non-marital property (property owned before the marriage) could possibly be subject to division to achieve a fair and equitable distribution.

In most states, gifts, inheritances, assets owned before marriage, increases in value of an asset owned before marriage, or items purchased with separate property funds, are considered separate, or non-marital, property.

When your property is divided, the court will generally make an overall division. It will not necessarily give each spouse a portion of each item of property. For example, if you have multiple bank accounts, rather than dividing each one, the court might award various accounts to your spouse and various other accounts to you. The court will also generally not award a piece of property that cannot be divided (such as a car) to both you and your spouse. Instead, the court would award the car to one spouse and offset its value by awarding another asset (or a larger share of another asset) to the other spouse.

What factors will the court consider when it divides my property?

In most states, the court will consider a variety of factors when distributing property:

  • The length of the marriage.
  • The spouses' ages.
  • Each partner's current and future income potential.
  • Education disparities between spouses, and whether a spouse contributed to the other's education.
  • Whether one spouse has significant non-marital resources available (for example, interest in a trust or large inheritance).
  • Financial needs.
  • Medical conditions (for example, conditions that prevent employment).
  • Previous agreements between the spouses (for example, a prenuptial agreement).
  • Whether the parties lived together prior to the marriage.

In most states, the court does not consider a spouse's bad behavior (for example, a marital affair or abuse) when dividing property, although there are exceptions, such as Texas. If a spouse has wasted marital assets, though, a court may consider that spouse's conduct when dividing the property. Depending on the circumstances, wasting marital assets could include:

  • Problem gambling or drug use.
  • Giving money away without your spouse's agreement.
  • Spending money on extra-marital affairs.
  • Spending lavishly on yourself after you have begun pursuing a divorce.

In most states, the court will also consider the tax consequences of awarding property to one spouse or the other.

What happens to my property while I'm waiting for my divorce to be finalized?

You may be able to get a temporary order stating who can use your property while you wait for your divorce to be finalized. For example, a temporary order could allow you or your spouse to live in the family home or restrict you or your spouse from accessing a joint savings account. Consult the laws of your state to determine whether temporary relief is available to you.

Does the court's order change the title to my property?

After the court orders a distribution of your property, you and your spouse may still need to change the actual title to the property. For example, a home titled to both you and your spouse may need to be deeded to either you or your spouse as an individual. In addition, a property that is financed in both of your names may need to be refinanced so that only the person who received the property in the divorce is responsible to the bank for the loan.

What if I decide later that the property division was wrong?

In most states, your ability to change a property division after the court has signed your final orders is limited and changing the orders will be difficult. However, there may be circumstances meriting a change to your property division. For example, if you believe that the judge decided your property division incorrectly, you may be able to appeal to the higher court, although are time limits (30 days in most states). Also, if your spouse committed fraud (intentionally lied) in order to get you to agree to an unfair property division, or you were under duress (you were forced to agree), you may be able to get a new division ordered. But it is difficult to prove allegations like fraud and duress.

Consult the laws of your state or a qualified divorce attorney to determine your options and deadlines relating to changing a property division.

Contact a McKinley Irvin family attorney for more information, or read more about the types of assets divided in a divorce or dividing real estate in a divorce.

Please be advised that family law cases can be very complex and are different for everyone, based on unique circumstances. The information provided here should not be construed as legal advice in your case.

McKinley Irvin proudly serves Washington State and Oregon with offices in Seattle, Bellevue, Tacoma, Puyallup, Vancouver and Portland. Contact our family law offices to set up an appointment with a McKinley Irvin family attorney.

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