What Happens to Your Stuff When You Divorce?
When a couple decides to divorce, one of the issues that will have to be addressed is the division of their property and debt. Generally, the court will resolve this in one of two ways: equitable distribution or community/separate property. Let’s have a look at both.
Equitable Distribution
Equitable distribution is considered to be a fair (but not always equal) distribution of all the marital property and assets. Typically, the spouse with the higher income will receive a larger portion of the distribution based on the assumption that they contribution more financially to the union. Equitable distributions are used in all states except community property states.
Community Property
Property is categorized in one of two ways: community property or separate property. Separate property consists of property and assets that were acquired prior to the marriage as well as inheritances, personal injury awards and workers compensation, even if it was received during the marriage. Separate property is not subject to distribution and stays with its original owner. Community property is any property and assets that were acquired during the marriage (with the few exceptions noted above) and is divided equally between the two parties. Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin and Puerto Rico are all community property states.
Debts
Debts are treated in much the same manner as property. However, it is not uncommon for the court to order the higher-earning spouse to pay for certain debts that should theoretically be the responsibility of the lesser-earning spouse. For example, the court may order that the lesser-earning spouse can live in the marital home however; the higher-earning spouse must continue to pay the mortgage.
Fault or No-Fault?
In some states, a no-fault divorce is allowed and property distribution is not affected by individual actions of the parties. However, many states also allow an “at-fault divorce” where both sides are allowed to present evidence that would place “blame” on the other spouse. In the case of at-fault divorces, the property distribution can be affected by the behavior and actions of the spouses. For example, if it is proven that one of the spouses had an extramarital affair, that spouse may receive a lesser portion of the marital property.
Planning Ahead
One way to ensure that both parties receive a favorable distribution is to create a prenuptial agreement prior to the marriage. Assuming that the agreement doesn’t overly benefit one spouse more than the other, the court will typically grant the property distribution as outlined in the prenup.
Alimony and child support are addressed separately from the distribution of property and assets. If all of these issues are easily agreed upon, you may be able to use a do-it-yourself divorce form. However, most need the assistance of an attorney.
For more on divorce and property distribution, check out these books on divorce and money (book review) and protecting your financial security when getting a divorce (book review).
26 Comments
I was married for 27 years, native state of Louisiana, and divorced in 2000. My divorce papers state that property distribution would be decided later at my discretion. Because my son (then age 17) was still living with my ex-husband and I left the home in search of employment out of state, I elected not to divide or sell the family home at that time. My ex-husband has continued to live in the home and has since remarried. He has refused to settle this out of court with me and I have not forced the issue in an effort to resolve it without hard feelings. I worked the entire time we lived together in our home from 1981-1998. I continued to send money for my son to live there after I moved out. The home is paid for and owned free and clear. How should I go about handling this issue now and get my share of this equity? I had paid a lawyer to handle this matter for me and he took my money and ended up disbarred when several clients (including me) complained to the Bar Assoc. My ex-husband has sold off some of our assets acquired during the course of our 27 year union. I am uncertain how to proceed having been burned once by a lawyer in the past. There is no time limitation on community property in Louisiana and I am entitled to this settlement.
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You (or your attorney) will have to file a motion in court requesting that the community property assets be divided and/or allocated, including the home. If your ex-husband has since sold some of the assets, and if you can prove it, he may owe you half the value of those assets.
You should file a motion as soon as possible. Contact the Louisiana bar association to obtain a referral for a family law attorney in good standing with the bar, or request a review of your case here.
I have a question to ask on the letter said “As i will notice in the petition,my wife intends to seek a ” status only” divorce. What it this mean ” this means that issues regarding property distribution, child custody, child support, and spousal support, among other things, will not be addressed. These issues will be left out for me and my wife to handles. My wife simply wants to dissolve the marriage and return to single status.
That mean I have paid for property distribution, child custody, child support, and spousal support. Because i don’t make alot of money but my wife alot of moneys, I need your answer!
Thank
Jason
If your wife filed for a “status only” judgment, that means that marital status will terminate and the court reserves jurisdiction over spousal support, child support, custody and division of property. A status only judgment does not address anything other than the termination of marital status – that does not prevent either you or your wife, however, from seeking separate support or custody orders to address those issues.
Do I get credit for the money I have spent to live outside the home after separation, prior to the divorce being final?
In a community property state, and if you spent community property money after separation to live outside the home, you will be charged with one-half that amount, since one-half of the community property belongs to you and the other one-half to your spouse.
If you spent separate property monies after separation (such as post-separation earnings) to live outside the home you are neither charged nor credited.
If you continued to pay the mortgage for the family residence and your spouse continued to live there while you lived outside the family residence, you may be entitled to the fair rental value for your spouse’s use of the family residence.
Husband and wife buy property; property in wife name only. wife cheats and is pregnant by another man. Husband wants divorce. does he still have to contribute to property mortgage? husband wants to walk away, period. State; Georgia
If Husband was contributing to the mortgage payments during the marriage he must continue to do so until there is a court order that provides otherwise.
I have a question im recieving a structured settlement it was settled during my marriage but it happened to me when I was a minor now my wife tells me as soon as I get the money shes entitled to half and then is going to divorce me if she allowed to do this I live in nevada. Any suggestions thank you
It depends on what type of settlement you are receiving. In Nevada, a portion of a personal injury award which is attributable to the pain and suffering of the litigant is not distributable in a divorce, but the portion of the award attributable to lost wages or impairment of earning capacity may be distributable in a divorce.
Hello, in the process of divorce. Right before filing, my husband sold off assets without my knowledge (motorcycle, several investments), and he has used that money to pay for a (reportedly very good) lawyer, whilst I’m stuck with no money for counsel myself. He says I’m going to get half the money from the motorcycle and investments “on the back end”. Do I have legal recourse? What’s my next step?
If you live in a community property state, the following will apply: during the course of the dissolution you will be required to list all community property. Be sure to list the proceeds from the sale of the items which were sold. In the division of assets, the court will award you half the value of these assets.
You should also have access to community funds with which to retain an attorney.
Even though the money has already gone into his lawyer’s pocket, it will be included in the division of assets?
Thanks for your reply, btw.
If the items that your husband sold were community property you will be offset for one-half that amount in the division of the assets. However, if you withdraw a like amount from community property to pay your attorney then it will be a wash.
If your husband has retained an attorney, I highly advise that you also retain an attorney.
I live in La and divorced my wife of 30 years. After divorce i granted in the decree that she can live in our residence free until our property settlement.
I then went and lived in a rental unit we own. We are trying to settle or property after a 5 year period of time… She now wants me to pay her rent and that unit…. During this time I have rented the other units we own and she has shared in the profits and loses… We also have another property that we own outright and where she has her business…. She claims not to owe me rent on that property ….. Why should she get rent from me and not pay any rent? I am not claiming any on the main residence where she resides.
In an Arkansas divorce a vehicle titled, licensed, insured and financed solely by the husband is award to the wife with the contingency that she secure her own financing, title, license, insurance, etc completely releasing the husband from the obligation. Several months have passed and the wife is in possession of the vehicle but not making payments and has taken no steps to refinance or license the vehicle in her name. What recourse does the former husband have?
I live in Louisiana. My divorce has been granted for about a year now. We have not settled property yet. I still don’t have a clear answer as to why. Is there something I can do to push this issue? I do have an attorney, and she just keeps telling me she has been calling and she is waiting on them. I am ready to call my ex’s attorney myself. Is that totally out of the question? My life is on hold waiting for this money…paying off bills that I am accumulating raising two children with a job that has cut my hours in half due to the recession. Thanks for you help!
The length of time it takes to negotiate and finalize a property division often depends of the complexity of the issues involved. You should contact your attorney in writing (e-mail is an expeditious way to do this) to obtain the status of your case.
My sister is going thru a divorce in Mississippi. They have NO kids. She makes more money than him and has always paid the house and other utility bills where he paid for groceries and anything that he wanted to do. He has a Harvey motorcycle that is paid off in March 2010. She has a retirement fund around $60,000. He tells her the house only appraises for $62,000. But he wants the divorce and the house with her to leave the house with nothing but her retirement. And go buy another house with her retirement savings….He made calls and text messaged another woman during the last 4-6 months of the marriage….He says no affair what I dont know….What should Tell her..besides go get another attorney….Really need help…
Your sister should seek advice from a family law attorney in her area. If the house was purchased during the marriage then both parties are entitled to half its value. It may make sense to sell the house and split half the sale proceeds between them.
Me and my wife have been seperated for 9 years.When we split I left
everything and we have since both moved on. I have lived with my current
girlfriend for 7 years now. Everything we have we aquired together. Now we are going through with our divorce and she says she can take half of everything I have now. We didn’t own any homes or stocks or anything like that , just regular household items and a car which was reposessed. We do have children but all that was settled through the Attorney General years ago. I live in Texas I know that this is a community property state, but would a judge really give her half of things she had nothing to do with? And how do they decide if the belongings are mine or my girlfriends? Are they going to take her stuff as well?
In some states, property/income acquired after the date of separation is separate property. This may or may not be the case in Texas. You should consult the Texas Family Code to find out the significance of the date of separation.
my brother is very ill..he has lost a leg has diabetes heart issues etc and is in his 50s..and is unable to work and is to get a workers compensation disability award…his wife of 13 yrs has decided out of the blue to divorce him..poor guy..he is very upset..anyway will his wife be able to get any of his disability award in the divorce>she is in her 40s and full time employed..plz let me know thanks
If our house was purchased in full with a
trust fund/ annuity payment from a lawsuit
settlement when he was 10 and my name
is listed as 50% owner is it still considered
community property?
My sister’s divorce was recently finalized with the decree stating that the marital home is to be sold. Her ex-husband has not yet left the home and will not cooperate or communicate with her regarding moving forward and contacting a real estate agent. What steps can or should she take at this point to initiate the selling of the home?
I am engaged to someone in Louisiana that makes about the same amount of money as my ex. Can my ex go after my fiance’s money to reduce child support or not give me the property settlement?