Divorce When Your Spouse Owns Everything

By Beverly Bird

If you live in a community property state, the law makes it almost impossible for your spouse to own everything. Half of every marital asset is yours, even if your name is not on the title. Community property states include Arizona, Idaho, Nevada, Texas, Wisconsin, Washington, New Mexico, Louisiana and California at the time of publication. Your spouse also does not necessarily own everything if you live in one of the 41 equitable distribution states. In these states, your share of marital property may be more or less than 50 percent; ultimately, it comes down to what a judge believes is fair.

Marital Property

Marital property includes anything purchased after the date of your marriage. This is true in both equitable distribution and community property states, because your incomes, earned while you’re married, are marital property in all jurisdictions. If your spouse acquires an asset by purchasing it with money he earned while you’re married, this makes the asset marital property. Generally, this gives you a stake in it no matter whose name is on the title. However, there are some exceptions.

Separate Property

If your spouse acquires an asset during the marriage with money that’s his separate property, you have no right to it. For example, if your spouse inherits $200,000 and uses the money to buy a home, and if he puts title to the home in his sole name, it is his separate asset; it was not purchased with marital income. Separate funds are anything he inherits, or anything he earned or acquired before the marriage. The latter might include a savings or investment account he established before you wed, and to which he never added your name. Property he owned before the marriage is also separate if he never added your name to the title.

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Valuation and Distribution

During your divorce process, your attorney or the court will separate out all assets that are your spouse’s separate property and value the remaining marital property. This involves getting appraisals for all assets of significant value, such as real estate, collectibles and retirement plans. Bank and investment accounts are valued according to their balances either at the time of your separation or your actual divorce, depending on the laws in your state. In community property states, you would receive assets equal to 50 percent of the total value of all marital property. In equitable distribution states, the judge will take several factors into consideration, then apportion the assets between you. These factors might include your ability to work and earn income and the value of your contribution to the marriage through keeping the home and caring for the children.

Prenuptial Agreements

Another exception sometimes exists to community property and equitable distribution laws. Even in community property states, a prenuptial agreement will override divorce statutes. If you signed a valid prenup, agreeing that all assets are your spouse's separate property, a court could potentially uphold that agreement. However, most states will not honor a prenup that is so unfair that it would leave one spouse destitute. The legal term for this is "unconscionable." If you signed an unconscionable prenup, take it to an attorney for review to find out if a court might declare it to be invalid.

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Does a Spouse Get Increased Value in an Inherited Home in Divorce?

References

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