According to the Institute for Family Studies, younger adults who marry tend to have higher divorce risks. It is widely claimed that about half of all marriages eventually end in divorce.
Apart from the emotional rollercoaster ride of a divorce process, a more objective problem follows. How to divide your properties?
Not all property is treated the same in divorce. Some things are considered marital property, which both spouses share, while others are separate property, which belongs to only one person.
If the parties can’t agree on asset and property division, and one or more parties are uncooperative, the judge will divide the property, says property division lawyer Andy Cook.
Let’s break down what counts as marital vs. separate property in a divorce.
Defining Marital Property: What You Need to Know
What counts as marital property? Marital property includes those assets and debts acquired during the marriage. It could be anything from the family home to bank accounts and even retirement funds.
If you got it together or from joint funds, then it probably counts as marital property. Gifts and inheritances to one spouse during marriage may be marital property depending on their use.
Being aware of what may be marital property is a key factor in deciding what is divisible. It will also make the entire procedure feel more secure. You can make decisions with ease and worry less about what comes next.
Understanding Separate Property: Key Concepts
Marital properties cover anything acquired during married life. On the other hand, separate properties include assets that belong to only one spouse. Knowing this distinction is important when facing the challenges of divorce.
Separate property may be something purchased before marriage. These can be inherited or gifted to either spouse individually. Please ensure your records are clear to support the ownership of such separate property. Any significant increase in value during the marriage can complicate matters. So know your rights.
Realizing what constitutes yours gives you confidence and a feeling of belonging during tough times. This enables you to defend yourself and protect what is legitimately yours while going through the divorce process.
How Property Classification Affects Divorce Settlements
You must learn how property classification impacts divorce settlements to defend your financial interests. In divorce proceedings, knowing whether things are marital or separate property may really affect the settlement.
Property acquired during the marriage is typically associated with division, whereas those assets acquired before marriage or with the intention of a gift are treated as separate property. This division stands for how property, such as homes, retirement accounts, and personal property, will be divided.
Distinguishing the different sets of properties will help you refuel your self-esteem. Getting clear about the classification of property will, in turn, ensure that whatever share you walk away with from the divorce can offer you some stability and a sense of belonging in your new life.
Do not mistake divorce for annulment. When it comes to annulment laws, a judge issues this when one or both spouses determine that there was never a valid marriage to begin with. As such, there are no marital assets or properties to divide, as the marriage is null and void.
Exceptions and Complications in Property Division
Property classification is generally straightforward, except during divorces, where exceptions and complications arise. Property classification may be more difficult if gifts or inheritances are given to a spouse during marriage and kept as separate property, especially when such assets are commingled with marital funds.
If you helped to finance your spouse’s education or career, you might feel entitled to share in your spouse’s increased earning potential. Another complication is that if a business was started before marriage but expanded during it, its value may be hard to determine.
Such complications can cause deep disputes and feelings of loss, so property division should be clear and fair.
Legal Considerations and State Variations in Property Laws
State-specific laws complicate property division in divorces. Each state defines differently what properties are those of marriage and which are separate, and thus it might affect your divorce.
For instance, in community property states, anything acquired after marriage will be considered marital property. In equitable distribution states, on the other hand, properties acquired during marriage may be distributed equitably, but not exactly equally.
Be knowledgeable about your state’s laws. These can affect the negotiations and settlements. Collect evidence and seek legal counsel. Being aware of your rights and responsibilities will afford you a sense of connectedness and strength while traversing such a difficult experience and prepare you for your future.
