What is the Division of Assets Divorce Law?

by Wayne Thomas
Settlement agreements are generally enforceable by the courts.

Settlement agreements are generally enforceable by the courts.

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The sharing of property between spouses is a basic component of marriage. When the legal relationship between spouses is severed by divorce, property shared during the marriage must be divided. Agreements regarding property division made before or during the marriage are recognized by courts, as well as settlement agreements entered into at the time of divorce. If the spouses cannot agree, state law varies on whether a judge must divide the property evenly or in another manner to achieve fairness. Knowing what is considered marital property and understanding the laws regarding property division will help you better prepare for the divorce process.

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Agreements

Properly executed prenuptial and postnuptial agreements can specify how property is to be divided in a divorce. These agreements are treated as contracts and must be in writing and signed by both parties. Although generally enforceable, an agreement may be declared null and void if obtained by fraud or mistake, full disclosure of the marital assets was not made when the agreement was signed, or it is otherwise unconscionable. If divorcing spouses have an amicable relationship and agree on how to divide property, they can file a settlement agreement. In this case, the court will uphold the agreement unless found to be unfair to one partner.

Marital Property

When a judge divides property, marital property must be distinguished from separate property. Separate property refers to any assets that belong to only one spouse and, therefore, are not subject to division. Marital property, also known as community property, refers to property acquired during the marriage. This would include bank accounts, real property and automobiles, regardless of which spouse holds title to the property or who earned the income. Separate property may be considered marital property if it has been commingled. Commingling refers to mixing separate property with marital property, such as depositing income earned before the marriage into a bank account that also holds income earned during the marriage.

Community Property

Community property states, like California, Nevada and Texas, treat each spouse as having a one-half interest in the marital property and debts. Because certain items may not be capable of division, such as a car or house, other property may be used to offset an award of the indivisible items. The important consideration is that marital property, in its totality, must be divided evenly.

Equitable Division

Most states divide marital property on the basis of what is fair and just given the circumstances of each individual case. This procedure, known as equitable distribution, can result in a division that is not equal, particularly if one spouse made non-monetary contributions to the marriage. State law varies on what factors can be considered, but generally a judge will look at the length of the marriage, age and health of the parties, and standard of living enjoyed during the marriage. Some states also consider marital fault to be a fairness factor in property division.