From separating co-owned property and debt to deciding who gets the dog and who gets the cat, this process is one that frequently holds divorce proceedings up and ultimately costs both parties a lot more in legal costs. Of course, it is always best if the couple can peacefully come to an agreement on their assets before heading to court, but this is not always achievable. When an agreement cannot be reached, the court will decide for them.
Here is how assets get divided in divorce when a couple is not able to reach an agreement prior to their court date.
Community Property vs Non-Community Party
The first thing the court does is review the couple’s assets to identify which assets are Community (marital) property and which are Non-Community (separate) property. Community property pertains to those assets that were accrued by the couple after being wed whereas Non-Community property pertains to assets accrued by one spouse before, or in some cases after, being married.
Most states differ in some of the details when it comes to Non-Community property, but in general it usually includes assets like:
- Property that was owned by either spouse prior to the marriage
- An inheritance received by either spouse (before or after the marriage)
- A gift received by either spouse from a third party
- Payment received by either spouse in a personal injury judgment for pain and suffering
It is important to note that Non-Community property can be converted into Community property if it is combined with marital property. An example of this would be if one spouse owned a home prior to marriage and then re-titled it, adding the other spouse as a co-owner of the property. Another example would be if one spouse received an inheritance and then deposited the money into a joint bank account.
In some states, should the value of one spouse’s separate property increase during the time they were married, the increase may also be considered marital property if the direct or indirect actions of the other spouse aided in the increase. An example of this would be if one spouse owned a business prior to being wed and the value of that business increased after the wedding partly due to the other spouse doing their part by handling the home duties, raising the children, sharing ideas for growth, etc.
How Assets Get Divided in Divorce
In Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin, and Puerto Rico, Community property is divided equally between the spouses and each spouse gets to keep his or her separate property.
In all other remaining states, any assets and earnings accumulated during marriage are divided between the couple. This is done equitably, but not always equally. In some cases where the division of marital property is not equal, the judge may order one spouse to use their separate property to help make the settlement fairer to both spouses.
The division of assets in a divorce does not necessarily mean the assets are physically divided. More commonly, the court will award each spouse a percentage of an asset’s total value. In the end, each spouse receives personal property, assets, and debts whose worth adds up to his or her percentage.
How Mediation Can Help Make Dividing Assets Easier
Mediation is an effective tool that can help divorcing couples negotiate their divorce and tackle sensitive issues, like the dividing of their assets, because the process is conducted in a less adversarial environment under the guidance of a neutral mediator.
In mediation, the mediator facilitates discussions between the two spouses and helps them work through their issues, so they can resolve their disputes outside of the courtroom. The result is a healthier, less expensive, and fairer divorce.
Contact Mediation Professionals of Long Island today and schedule a meeting with one of our Mediators to discuss how we can help you and your spouse come to an equitable agreement on the division of your assets and debts.