Divorce and Property Division
Division of Property Generally
When spouses have decided that their marriage is no longer viable and divorce is the proper remedy, numerous issues are involved, including the division of their property. In order for the courts to construct an equitable settlement between the parties, they must determine what type of property is involved in the action. There are basically two types of property involved in a marriage: separate and marital property.
Separate Property vs. Marital Property
Separate property is property owned by either party before marriage. Separate property also includes property obtained by way of a gift from a third party or property inherited by one party during the course of the marriage. In most states, gifts are considered separate property. It is important that the separate property was not combined with marital property so as to make the separate property unidentifiable or untraceable. Separate property remains in the owner’s possession after a divorce because it is excluded from property division. However, courts may include separate property in the division of the parties’ property if needed in order to achieve an equitable result.
Marital property is property that the parties accrued during the course of their marriage. Marital property may include:
* Retirement, pension and 401K benefits.
* Employee benefits and stock options.
* Increase in the value of property owned by the parties.
* Separate property that was commingled with marital property.
* Frequent flyer miles.
* Family-owned business.
Community property is only a consideration in a number of states such as California. This type of property includes the parties’ earnings and accumulations on earnings after the marriage.
Factors Considered in Property Divisions
There are numerous factors to be considered by courts when considering and determining property settlement issues. There is no theory or calculation, such as a formula used for determining child support, in determining property settlements. Courts attempt to divide the parties’ property in the most fair and equitable manner possible. They have wide discretion in determining the division of property in a divorce matter. In some states, fault is considered into the equation when dividing the parties’ property. In other states, fault is not considered at all.
Often times the marital home is the parties’ largest asset. Many courts are reluctant to order the sale of the home when minor children are still living in the home. Provisions may be made in a divorce judgment providing that the custodial parent may stay in the marital home until the youngest child reaches the age of majority.
Concealment of Assets
Some parties don’t play nice during divorce proceedings and attempt to conceal assets. Transferring or concealing marital assets is prohibited. If a court discovers that one party attempted to or did conceal assets, that party may be estopped from receiving any part of the concealed or transferred property. The party attempting to conceal the asset or assets may also be the subject of a tort action in some states.
Copyright 2012 LexisNexis, a division of Reed Elsevier Inc.