Understanding Property Division in Your Divorce
When a married couple determines that dissolution of marriage is the best decision for them and their family, there are many issues for which agreeable resolutions must be found before the divorce can be finalized. Property division is one of the more complicated and arduous issues that arise as a result of divorce proceedings and includes not only the division of property but the division of debt as well.
How property is divided between divorcing spouses varies from state to state, and it would be beneficial for spouses to be aware of the property division guidelines of the state in which they live. States utilize one of two basic schemes when determining property division: community property or equitable distribution. States adhering to community property guidelines typically equally divide community property between the spouses. Some property may be considered separate property instead of community property, and each spouse retains the rights to his or her separate property.
States that have adopted equitable distribution practices divide divorcing spouse’s property fairly but not always equally. It should be noted that division of property is not necessarily indicative of an actual physical division of the property but may indicate a percentage of the property’s total value.
There are rules and guidelines that states use in determining community property (jointly-held property) and non-community property (separate property). Community property includes things such as: all earnings gained during the marriage, all property acquired with those earnings, and all debts incurred during the marriage. Separate property includes things such as: inheritances or gifts given to one spouse, vested pension proceeds prior to the marriage, and property purchased with non-community funds by one spouse. Separate property may become community property if a portion of the monies used to purchase the property were community funds.
In an ideal situation, the divorcing couple would work out a mutually acceptable agreement in regard to property division either on their own or with the assistance of an attorney or third-party mediator. If the couple is unable to reach a mutually satisfactory solution, the property dispute will be settled by a judge in a court of law. Before beginning the process of property division, there are several steps that spouses will want to take to ensure that property if fairly divided, such as accurately reporting both assets and liabilities. By doing so, couples can more effectively and efficiently reach a satisfactory property division conclusion.