Property Division in Divorce

"Red Flags"

There are "red flags" or what courts commonly look at for possible problems in the fairness of a case. The most common are real estate (a house acquired during the marriage), retirement accounts, and a substantial difference in income in a long-term marriage.

"Marital Property" and "Separate Property"

You should divide your property fairly. This is usually close to an equal division. Anything that you got during the marriage is included. This is known as “marital property”.

What either of you had before the marriage is not included. This is known as “separate property”.

The fact that one party has had more income does not change the fact that each should share fairly in the property division.

A greater income however can mean that a greater share of the debts should be paid by that person.

In cases where two people have been married for more than a short time, it may also mean that the person with the higher income will pay spousal support or what used to be called alimony.

Fair Division

Spousal Support

Settling Disputes of Property

Furniture and Other Items

What if you disagree about how to divide your furniture and possessions? Here is a simple way to settle the matter. Make a list of all the items that you disagree about. Flip a coin. The winner takes the first pick. The other spouse picks the next item and you alternate picks until finished.

If there is a dispute over the value of real estate, you may want to get an appraisal of the real estate. If you cannot settle your differences, the Court may just order that the real estate be sold. The two of you will divide what you get from the sale.

If there is an issue of what a pension is worth, an appraisal of the current value of the pension will be made by a qualified expert.

Disputes over property will increase the time and the cost of a divorce.

Real Estate Value

Pension Value

Financial Affidavits

Financial Affidavits are required in many counties. This is to satisfy the requirement that a full and complete disclosure of assets and liabilities has been made. The main things in filling out Financial Affidavit(s) are: that they are complete and that they are consistent.

A Court may look at the Financial Affidavit(s) to determine if the provisions of a Separation Agreement or a proposed Dissolution Decree or Divorce Decree are fair and equitable to each party.

While a Separation Agreement, Dissolution Decree, or Divorce Decree do not usually state what the value of an asset is (such as a car, bank account, retirement account, or house) or the amount of debt(s), a financial affidavit will tell the court the value of assets and liabilities.

Courts (or court employees who are reviewing a file) may compare the Separation Agreement and the Financial Affidavit(s) to see that they are consistent—that all assets and liabilities which are listed in the Affidavit(s) are dealt with in the Separation Agreement, and vice versa- that everything listed in the Separation Agreement is also listed in the Affidavit(s

Retirement Accounts

If the retirement is a 401(k) or similar retirement plans, one-half of the value of the plan which was accrued during the marriage will be transferred to a separate retirement account for the other spouse.

In the case of a pension, an Order is prepared where the other spouse will get half of the pension which was acquired during the marriage. For example, if there has been a 10 year marriage and the working party eventually retires with 20 years of service, the other spouse would get one-fourth of the value of the pension when it is paid out.

The amount of the retirement account to be transferred can vary according to circumstances. It may take into account how other property and debts are being divided.

Sometimes the value of retirement accounts of each party are roughly equal, and each party will keep their own retirement account.

Other times the retirement account of one party is equal to the value of some other property that the other party is getting.

An example would be where one party keeps their 401(k) and the other party is keeping the house.

If a retirement account must be divided, a separate court order is prepared. In the case of a 401(k), this is known as a Qualified Domestic Relations Order (QDRO).

In the case of a public pension or a public retirement account, it is known as a Division of Property Order (DOPO).

If the retirement is through the Federal Government or the military, Federal rules and Federal law are followed. A lawyer can help in preparing the proper court order that is required by the Federal Government.

Retirement accounts, deferred compensation, and pensions are considered marital property for the period of the marriage.

They are not the separate property of one spouse unless they were from before the marriage (or after the separation of the parties).

Retirement that was from before the marriage is not marital property and is not divided.

Dividing Retirement Accounts

Consultation

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