What's mine is yours and vice versa - Wait, really?
It’s more nuanced than that
Today we are discussing commonly asked questions about how property gets divided in divorce.
Specifically questions that are asked:
- How does Marital Property get divided in an equitable distribution state (like Colorado where I am from)?
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Which states are Community Property, and how does that differ from Equitable distribution?
Can Separate Property ever be divided in divorce?
How does Marital Property get divided in an equitable distribution state (like Colorado where I am from)?
To be very general: The judge will divide ALL of the couple’s marital property and debts in a way the judge determines to be fair to both spouses under the facts of the case. Be aware that “equitable” does not necessarily mean a 50-50 split.
Each state has different guidelines when deciding how to distribute property equitably.
Here are factors that come up commonly:
- How long did the marriage last?
- What are each spouses age, physical and emotional health?
- What did each spouse bring to the marriage from an income and property perspective?
- What was the couple’s standard of living during the marriage?
- What is the time, expense, education or training needed for the spouses to reach a similar standard of living
- Is there a prenuptial agreement or postnuptial agreement?
- How do the agreements deal with the distribution and division of property in divorce?
- What are each spouses overall economic circumstances
- What is each spouses income and ability to earn
- This is commonly based on education, training, experience, any a sense from the job market, care giving responsibilities
- Did either spouse delay pursuing a career in order to care for children or support the other spouse?
- Did one spouse contribute to the other spouse’s education or earning power of the other spouse?
- Did either spouse contribute to acquiring, keeping or improving marital property?
- Did either spouse’s actions waste marital property?
- What are the tax consequences of a proposed property distribution
- Is there a need for a parent with physical custody of a child to continue to own or occupy the marital residence?
- What are each spouse’s debts and liabilities?
Which states are community property and how does that differ from equitable distribution?
Here are the states that are community property:
- Arizona
- California
- Idaho
- Louisiana
- Nevada
- New Mexico
- Texas
- Washington
- Wisconsin
That means that in the states listed above each spouse owns half of the income and debts the other spouse earned and incurred during the marriage.
Keep in mind community property states traditionally required equal division of assets, but some community property states do follow the principle of equitable division in the context of divorce.
Can Separate Property ever be divided in divorce?
In most states, spouses keep their own separate property when they divorce. Be aware some states (for example Massachusetts and Washington) allow judges to divide separate property when distributing the couples property during divorce.
The bottom line, is the rules vary from state to state and it is beneficial to chat with a local lawyer about the rules, what to expect, and specific questions.
Divorce sucks- you don't have to go through it alone, call me for help on the financial side of the split.
The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Brianna Beski of Raymond James Branch 3BA and not necessarily those of Raymond James or Raymond James Financial Service.
