When facing divorce, most people have questions about what items constitute marital property. The answer may vary from state to state. However, no matter where you live, you won’t be entitled to an automatic 50% of the marital property.

Equitable Distribution vs. Community Property

There are currently 41 "equitable distribution" states and 10 "community property" states. These community property states are:

  • Arizona
  • California
  • Idaho
  • Louisiana
  • New Mexico
  • Nevada
  • Texas
  • Washington
  • Wisconsin

Equitable Distribution

To most people, the concept of equitable distribution would generally mean an equal division of all property. Basically all marital property would be split completely down the middle. In each of the 41 states that employ equitable distribution, it is the court that determines the fair division of the marital assets. The court could award percentages to each spouse without considering a 50/50 split. In fact, either spouse could receive all of the property, or none of the property.

When considering what is equitable, the court considers the following factors:

  • Length of Marriage
  • Premarital Assets
  • Tax Liabilities
  • Debts
  • Prior Agreements

There are several things you should consider if your marriage will be dissolved in a state supporting equitable distribution. For instance, you should realize that everything acquired by you or your spouse during the marriage, is subject to division. It doesn’t matter what name was used to acquire the asset or who provided the money to purchase the asset.

Litigants should also remember that judges aren’t detectives, and they aren't responsible for proving whether or not assets exist. Proof is always required when making allegations in court. You must be able to prove that your spouse disposed of assets in order to avoid having them divided; making an accusation isn’t enough.

Community Property

There are only 10 states that use the concept of community property when dividing martial assets. In these states property division automatically begins at 50-50. Here are a couple of things to keep in mind if you live in a community property state:

  • Spouses may hide or increase debts during divorce since spouses are equally responsible for all debts.
  • For spouses who have dual residency it would be wise to seek the advice of an attorney if either state practices differing concepts of property division. There are advantages and disadvantages to either approach.

What Constitutes Marital Property?

In order to accurately realize what marital property is, it must be determined what constitutes individual property. Generally the following is considered individual property:

  • Inheritance
  • Gifts
  • Property acquired prior to marriage.
  • Property acquired after separation

In most case the debts and assets acquired communally are divided equally. There are a few exceptions to this rule, and these debts are generally assigned to the original debtor.

  • Student Loans
  • Gambling Debts or Bad Debts
  • Personal Injury Proceeds

Marital property can include real estate, but it might also include vehicles, bank accounts, investment accounts, and retirement benefits. While you may not be able to immediately access funds from these accounts, such as accounts in a 401(k), IRA, or pension, it’s still a marital asset. The total value of the assets minus the liabilities equals the marital property.

Value assigned to certain pre-marital assets becomes a moot point the longer you are married. For instance, the pre-marital assets involved in a 25 year marriage would have very little relevance. A 5 year marriage would have more significant pre-marital assets.

Additional factors considered are the contributions each party provided to the marriage, as well as certain economic circumstances that affect both parties. The earning abilities of either partner are also considered, especially if one spouse did not work outside the home. Any of these factors could determine varying levels of property division between the two parties.

Consulting an attorney regarding the property division laws in your state is always a wise decision. The court will have the final determination in the division of all marital assets, and it is best to be well prepared in order to negotiate fair division of property.

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