Separate Property vs Marital Property
Separate Property vs Marital Property – What Happens in a Divorce?
One of the hardest parts of getting divorced is agreeing on the splitting of assets. There are a lot of issues taken into consideration when dividing assets, including the contribution of each person previous to the marriage, during the union and since separation. It is also based on need and fairness.
Marital property is usually divided – sometimes it may be as simple as “you can keep your collection of skiing equipment, but that means I want the home entertainment system, which is of equal value”. With assets that cannot be divided up like that, such as a house or a car, the item may be sold and each person gets part of the cash. The exact laws for how this works can vary depending on where you are in the country. In general, assets that are owned by a husband and a wife together are called community property, and different states will have different ways of handling this. For example, the state of Utah is a community property state, and this means that the husband and wife are equal owners of everything that is earned by either party from the day they get married until they day they separate.
Any property that is acquired during the marriage, which was paid for by ‘community’ money, is owned equally by the husband and the wife, regardless of who made the purchase.
Debts Count Too
In community property states, it is not just assets that are considered shared between couples, but debts too. Each spouse is liable for the debts of the other – whether those debts are credit cards, traditional loans, mortgages, car loans, or other debts. This means that when a couple decides that they want to get divorced they should settle all such accounts as quickly as possible. In the eyes of the law, the couple will be responsible for debts even if the name of the other person is removed from the account. If the debt was started while the couple was together, then the couple is liable until the debt is paid off.
Separate Property vs Marital Property
What is Separate Property?
So, if anything acquired using ‘community money’ is considered ‘community property’, then what is separate property? Well, separate property is anything that one spouse formally agrees, in writing, to give up to the other spouse. This can be a complex issue, though, and it is possible for separate property and community property to become mixed up. When this happens, it is essential that the couple keeps good records, and traces payments, to show where the separate and community funds went, and where they came from.
One example of this would be if a husband puts down the initial downpayment for a house before they enter into a relationship. They then get married, and the remainder of the house is paid for with ‘community money’. When the marriage ends and the house is sold, if the husband is able to prove that they put in separate funds for the down payment, they may be entitled to be reimbursed for that payment. Your Ogden Divorce Attorney can advise you on this.
This is true for debts as well. Anything that was incurred before the couple got together is considered to be a separate debt, and this means that when the couple gets divorced, only the person who owes the debt is liable for it.
The date of separation is something that should be looked at by your American Fork Divorce Attorneycarefully, because different states have different rules regarding this. For example, some states consider separation to be the date that the spouse moves away from the marital home. Others consider it to be the date that the spouse formally agrees to end the marriage. It is important that the date is recorded accurately, because that is the date at which any future property or debt acquired is no longer considered ‘community’.
The issue is complicated, however, by the fact that the courts look for evidence of when the marriage broke down, and what is considered evidence is quite subjective. If you feel that your marriage is starting to break down, be sure to seek legal advice from an American Fork Divorce Lawyer, Sandy Divorce Lawyer, or an Ogden Divorce Lawyer as quickly as possible. Otherwise you could end up in severe financial mess. Do not leave the marital home until you have sought financial advice, unless you have reason to believe that either you or your children (if you have any) would be in danger of physical violence if you remained in the home. Do not take any action such as selling property or closing accounts without seeking advice, either, as the courts may view this as a deliberate attempt to deprive your partner of assets. It is reasonable to want to have a small emergency fund, but you should not try to hide assets from your spouse, because this would be frowned upon if it were identified during the divorce proceedings and could impact your chances of fair awarding of assets.