During a divorce, marital assets such as real estate, cars, stocks, savings accounts, retirement accounts, businesses, and household items are divided by the court or agreed upon by the couple. Laws vary by jurisdiction, with some dividing assets equally and others dividing them equitably. Real estate can be especially difficult to divide, and retirement plans and employment benefits may also be included. If one or both spouses own a business, it will need to be valued before being divided or sold. Automobiles, household items, and collectibles are subdivided according to the laws of the jurisdiction or court order.
When a married couple goes through legal divorce proceedings, one of the first things the court will do is divide the couple’s marital assets. Marital assets are the items of value that were accumulated by the couple during the time they were married. Real estate, cars, stocks, savings accounts, and bonds are among the most common marital assets. Other types of assets may include retirement accounts, furniture, home furnishings, businesses, and cashed-in life insurance policies.
If a couple can agree on the division of marital property, it can save a lot of money in legal fees. If the couple disagrees, the property will typically be divided by the court. In that case, each party’s attorney will argue for what their clients believe is rightfully theirs. Regardless, hiring a family or divorce attorney is recommended for most divorced spouses.
There are many laws regarding the division of marital property. Some jurisdictions divide ownership in a 50/50 fashion. Other jurisdictions do not divide them equally, but divide them “equally and equitably”. In some places, the court will determine whether either spouse was guilty of the divorce and divide the property accordingly. For example, if a spouse has been involved in an extramarital affair, the court may split the assets in favor of the non-cheating spouse in an 80/20 fashion.
One of the hardest assets to divide is real estate, especially the family home. Many jurisdictions have laws stating that even if the home was purchased by a spouse before marriage, the home can still be considered a spousal asset. In some jurisdictions, the spouse has the right to divide the value of the home. In other jurisdictions, the spouse has the right to divide only the increase in the value of the home during the term of the marriage. For example, if the home was purchased before the marriage by one spouse for $100,000 US Dollars (USD) and increased in value to $150,000 USD during the marriage, the other spouse has the right to split the increase in value or to split $50,000 USD.
A good divorce attorney will typically direct his or her client as to how the laws in the respective jurisdiction will affect the division of the house. Some options that may be discussed are selling the home or having one spouse buy the other spouse’s share of the home. In some cases, one spouse may lease the home exclusively to the other spouse.
Retirement plans are also valuable assets that may be included as a divisible marital asset by some jurisdictions. Retirement plans can include 401(k) plans, corporate profit sharing, retirement plans, and Roth IRAs. Some jurisdictions also include benefits derived from employment, such as vacation days, bonuses and stock options. It is recommended that each spouse meet with an attorney and accountant before agreeing to split any retirement or employment benefits. An expert will be able to direct her client according to the laws of the area and inform her client exactly what she is giving up.
If one or both spouses own a business, this too can be considered a marital asset. The court will follow the laws of the jurisdiction, but may also consider additional factors, such as how much each party has worked towards the success of the business and who started the business. The business will need to be valued before being divided or sold.
Automobiles, household items, and collectibles must be subdivided under the laws of the jurisdiction or pursuant to a court order. In most cases, the value of these items can be found through comparison shopping. Once a value is determined, the items can be sold for cash or purchased from the other party. In some cases, it is best for spouses to make a list of the marital elements they want. Sometimes, many of the items that one spouse wants are irrelevant to the other spouse, making it easier to divide marital property.
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