When you and your spouse decide to get a divorce, you may both feel amicable at first. While staying fair and kind towards one another would be ideal, this is not always the case when money comes into play. How your assets are divided is first determined by whether you live in a community property or equitable distribution state. Then establishing what assets are marital ones and what assets are separate is done. If your marriage also has debt, this may cancel out some of your assets. Your marital property is then divided either by agreement between both parties or by the judge if both parties can't come up with an agreement.
Community Property Vs. Equitable Distribution States
Community property states divide all marital assets in half, giving each party a 50% share in the asset. If there is a marital home, the parties can agree that one party keeps the home only if the other party buys out their 50% share. In equitable distribution states, the division of property is a bit different. While property may still be divided in a close to 50/50 split, there is some leeway to provide a higher percentage of the assets to the partner who may not have the same earning capacity. For example, if one spouse was a stay-at-home parent for ten years and the other was building a legal career, the court may award the stay-at-home parent a higher percentage of the marital assets.
Marital Assets Vs. Separate Assets
If you had $40,000 in an IRA before you married your spouse, this amount is a separate asset. If during the course of your marriage, you put another $10,000 into the IRA, the $10,000 is considered a marital asset. Anything both parties invest in with communal, marital funds becomes marital property. The same goes for any bank accounts you had prior to your marriage. If you had a big bank account before you were married and you kept that money separate, it is still your bank account. If you took $20,000 out of a separate bank account and put it into a joint account, the $20,000 is now considered marital property.
If you can come up with an agreement with your ex, this generally works best for both parties. If both of you can't come up with an agreement, it will be left up to the court to determine the property division.
For more information, contact local professionals like Healy and Svoren Attorneys at Law.