Divorce Property Rules

By Rob Jennings J.D.

When you and your spouse separate, you must split your economic lives as well as your personal lives. Although the law on property division varies from state to state, all states have some way of dividing marital property and debt upon separation. Learning how your marital estate may be distributed can make an often confusing process easier to bear.

When you and your spouse separate, you must split your economic lives as well as your personal lives. Although the law on property division varies from state to state, all states have some way of dividing marital property and debt upon separation. Learning how your marital estate may be distributed can make an often confusing process easier to bear.

Community Property

The nine "community property" states follow the "50-50" rule: All property acquired during a marriage by a married person is presumed to community, or marital, property. This is usually divided equally upon divorce or legal separation. Community property can be divided by actually dividing each asset or by distributing the estate equally to each spouse. If a division results in one spouse receiving assets that are worth more than the other, the spouse receiving more can pay the other to balance out the division.

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Equitable Distribution

The 41 other states use "equitable distribution" to divide property during a divorce instead of community property. While community property courts presume marital property should be divided equally, equitable distribution requires that the court divide it equitably, or fairly. Since "fair" and "equal" don't always mean the same thing, equitable distribution statutes typically have a variety of factors that a court can use to justify an unequal distribution. If you live in an equitable distribution state, your family court will probably presume that an equal division is fair, but you might not get 50 percent of your marital estate.

Equitable Distribution Factors

Courts in equitable distribution states consider a variety of factors in deciding whether to award an unequal distribution. The specifics vary by state, but common "distributional factors" include the length of the marriage, the spouses' health, the income or property each party brought to the marriage and each spouse's income and earning capacity. Courts may also consider one spouse's contribution to the other's education, each party's contribution to the increase or decrease in value of marital property, the contribution of one spouse as a homemaker, tax consequences and the parties' debts.

Dissipation of Marital Assets

Dissipation of marital assets occurs when one spouse wrongfully spends marital funds either before or after separation, like buying an expensive car with funds from a joint account. The court can order the wrongful spender to repay the marital estate if the expenditures occurred after the marriage was irretrievably broken down and without the approval of the other party. If you're concerned about your spouse dissipating assets, you can seek a restraining order at the outset of your case. Some states impose automatic restraining orders as soon as someone files a divorce action.

Marital Vs. Separate Property

Most family courts are concerned with dividing marital and divisible property, not separate property. Marital property typically includes all property acquired by either party during the marriage, with exceptions generally made for inherited or gifted property. Divisible property consists of passive increases or decreases in value on marital property -- such as dividends on stocks. Separate property is everything that isn't defined as marital or divisible.

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Can She Really Take 1/2 of Everything in a Divorce?

References

Related articles

How to Divide Up the Assets for a Divorce in Illinois

In Illinois, you have the right to reach a property settlement agreement with your spouse: the two of you can mutually decide how your assets and debts will be divided in a divorce. But if you don't get along, or otherwise can't come to an agreement, the court will make this decision for you. Illinois law follows a system of equitable distribution to divide your marital assets. This means the court will divide the property in a fair and just manner -- though not necessarily equally -- after evaluating your circumstances.

Proving Money Is Inherited

Each state has its own laws regarding the division of marital property in a divorce. Community property states, which stand in the minority, require courts to divide an estate equally, whereas equitable distribution states -- the majority -- seek to divide estates equitably, or fairly. In both types of jurisdictions, inherited money is usually considered separate property and not divisible in divorce. The burden of proving that certain funds represent your inheritance, however, will likely rest on you.

Do You Legally Have to Return the Engagement Ring if Getting Divorced?

Most states' legislative codes are pretty concise about how courts divide marital property in a divorce. The problem with engagement rings is they do not represent a clear cut example of marital property. One spouse purchases the ring and gifts it to the other prior to marriage, not after. Most states don't have definitive statutory rules for what becomes of the ring if the couple later divorces, but there are trends in how courts generally rule.

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