
Property Division and Asset Division
Every marriage has at least one topic in common – property. Whether they own a million-dollar mansion or a beat-up RV, a couple will always have to divide up the property - including any real estate or financial accounts and debt. It is more economical to come to an agreement on these issues but that obviously doesn’t always happen. If you make a court decide, it will be up to you and your lawyer to prove to the judge why the property division should occur the way you want it to and not the way your spouse does.
Certain assets remain the exclusive property of one of the marriage partners, even after marriage, and some will be divided. This is done with debts as well. Most debt incurred while married will be shared upon dissolution, though a few personal debts may remain exclusively yours.
Remember that the divorce judgment establishes the obligation between the spouses but does not change the contractual obligations of one or both spouses to the lender .
Marital or Community Property
Marital or community property is defined as assets and debts newly acquired during the marriage, either jointly or by one party, other than by a gift or inheritance to one spouse.
Most states do not have a set mathematical formula for division, and the court will determine a fair distribution based upon a combination of factors as set forth in the state’s statutes.
Non-Marital or Separate Property
Non-marital or separate property are the assets and debts owned prior to the marriage that remain unchanged, or gifts or inheritances during the marriage to one spouse (usually including gifts by one spouse to the other).
Commingled Property
Commingled property are the assets and debts that were non-marital but which were traded in to acquire new property, repaired or enhanced during the marriage with marital funds, or non-marital debts paid with marital funds.
Dissipation
Dissipation is the use of marital assets or creation of marital debt by one spouse for non-marital purposes once the marriage has begun to unravel. The spouse found to have caused dissipation might be required to reimburse the marital estate.
Premarital Agreement:
Also known as a prenuptial agreement, a premarital agreement is the primary method of keeping separate property from becoming joint property after marriage. A premarital agreement specifies the separate property of each party, any property agreed to be joint property, and dictates how property acquired during the union will be treated as either separate or joint.
Real Estate
The acquisition of real estate in joint names or the transfer of existing real estate into joint ownership creates legal rights and liabilities for both parties. Real estate acquired by one spouse after marriage is generally going to be treated as marital property subject to the claims of the other party.
If the desire is not to create rights of the spouse in real estate, a marital attorney should be consulted prior to the acquisition of the property to determine if segregation of the property is legally possible.
Business Property
For income-producing real estate and self-employment business assets, the creation of a business entity, such as a corporation, limited liability company or trust, can be used effectively to segregate the property. While appropriate efforts may segregate the property itself, the income from the business during the marriage – and possibly increases in value of the business property – may still be marital property.If you find yourself in a position where your marriage has failed or failing, we can help. Call (217) 367-1647 to schedule your consultation.