December 1, 2023
Each divorce is unique, and each state has its own laws governing the divorce process. However, one requirement is present in nearly every U.S. divorce case: spouses must determine how to divide their shared property, assets, and debts.
Whether a couple has minimal assets or massive wealth, this can be a contentious sticking point in many divorce cases. Both spouses want to protect their future financial situation post-divorce.
Too many people underestimate their property rights in a divorce. Always discuss your situation and asset and property division goals with an experienced St. Petersburg divorce attorney today.
Property Division Laws
Each jurisdiction has its own rules for asset division, but some common principles guide the division of assets during divorce, no matter where you file your case.
Identifying Marital vs. Separate Assets
Marital assets include property, income, and debts acquired during the marriage. Separate assets, such as inheritances or gifts received by one spouse, are usually not subject to division.
Sometimes, the line between marital and separate property blurs. What if you received an inheritance but used it for a down payment on the marital home? What if your spouse owned a business before marriage, but the business has increased in value during your marriage?
These are all important questions for your divorce attorney.
Community Property vs. Equitable Distribution
In states following community property laws, the law considers all marital assets community property. In most community property states, spouses typically split their shared property 50/50, regardless of other circumstances.
Most states are equitable distribution states.
In these states, a court may not divide marital property equally, but it should do so fairly based on:
- Each spouse’s contributions
- Financial circumstances
- Length of the marriage
- Who stays in the marital home
Weighing these factors, spouses should determine a fair and equitable way to divide their assets.
Complex Asset Division Issues
- Valuation of assets – Accurate valuation of all assets is crucial and can sometimes be challenging. Spouses must assess real estate, businesses, investments, and personal property fairly to determine the value at the time of divorce.
- Considering non-monetary contributions – Even if not financially, each spouse’s contributions to the marriage are important considerations. This includes homemaking, child-rearing, and support for a spouse’s career.
- Debts and liabilities – Spouses must also divide marital debts. This includes mortgages, loans, and credit card debts. Both spouses may need to pay for these obligations, depending on the jurisdiction.
- Retirement accounts – Retirement accounts, pensions, and 401(k)s are subject to division but often require additional steps. A Qualified Domestic Relations Order (QDRO) may be necessary to transfer these assets without incurring penalties.
- Professional practices and businesses – Valuing and dividing professional practices or businesses can be intricate. This may involve hiring experts to assess the business’s worth.
This is a lot to consider, and you must cover all these bases to ensure a fair division of assets. Allow your divorce attorney to handle all of this for you.
Prenuptial Agreements and Asset Division
If spouses have a prenuptial agreement, it may play a crucial role in determining asset division.
Couples sign these legally binding contracts before marriage (or during marriage, for postnuptial agreements), and the agreements usually outline how they will distribute assets in case of a divorce.
Prenups often set out which assets will be separate property or marital. This can include real estate, business interests, investments, and other valuable assets. Prenuptial agreements can also protect one party from assuming responsibility for the other’s debts once they divorce.
Prenups are particularly beneficial in cases where one or both parties have significant family wealth. They can protect family assets, so they are not subject to division in a divorce.
While prenuptial agreements can protect individual interests and make the asset division process easier, not every prenuptial agreement is enforceable. Your divorce lawyer should review your agreement and determine whether it should govern your asset division.
For example, if you signed the agreement without full disclosure of your spouse’s wealth, the agreement might be unenforceable.
Meet With a Trusted Divorce Attorney
Property and asset division can largely define your post-divorce financial situation, so you must ensure a fair and favorable outcome. The best way to accomplish this is to consult a skilled family lawyer in St. Petersburg who handles complex asset division from the very start of the process.