In the unfortunate instance your marriage ends, you’ll likely have property; a house, car, furniture, investments or bank account funds. If you’re not sure of your rights, some of that property could be granted to your ex-spouse. It is important to know what is rightfully yours prior to the division of property in the divorce.
Community vs. Equitable Distribution
Courts base their property distributions based on the law for their specific state. As of 2015, a handful of states (Louisiana, Arizona, California, Texas, Washington, Idaho, Nevada, New Mexico and Wisconsin) follow what is known as community property law, which means that each spouse is entitled to half the property acquired during the marriage–property you had before you got married or get after the divorce is considered separate property, and you retain ownership of it unless you choose to transfer the title or gift it to your spouse. Some common exceptions to the 50/50 general rule are if your spouse misappropriates the property acquired during the marriage, you or your spouse have educational debts or the court has awarded you or your spouse a personal injury award.
The majority of states adhere to equitable distribution or common law. In these regions, the goal of the courts is to distribute property in a way that is fair to both spouses. What’s critical to understand here is that fair and equal aren’t necessarily synonymous. For instance, suppose you have low job prospects because you’ve been out of the workforce for a long time as a homemaker, whereas your spouse has a terrific job history and is currently employed. In this case, the court might deem that it’s fair for you to get more of the property, because your spouse is in a much better position to stay financially stable than you are. What you get in an equitable distribution state, therefore, depends on a variety of factors, such as health, asset types, tax considerations and marriage length.
Property Distribution Agreements
Regardless of whether your state follows community or equitable distribution law, you have the right to draw up a formal agreement with your spouse that dictates how you want to distribute marital property in the event of divorce. Known as prenuptials, these agreements, as their name implies, must be drawn up and processed before you get married. A family law attorney can help you and your partner determine whether it is advantageous to complete this piece of paperwork given your circumstances and goals.
Distributing assets during a divorce can be a messy and time consuming process. Nevertheless, if you know your rights, you stand a much better chance of getting a good outcome and avoiding unnecessary stress.