Dividing your property is a big issue whether you do the divorce yourself or hire a lawyer. You have many tough decisions regarding your divorce, whether you live in a community property state or not. The best possibility is for both partners to split debts, property and assets. Disputes lead to lawyers who can negotiate the division before heading to the courtroom. Factors in connection with property division include the type of divorce, the property and the state.
Types of Divorce
The type of divorce you are dealing with is a major factor when dividing your assets. When both people agree on the terms of the divorce and file the papers, it’s an uncontested divorce. An uncontested divorce usually doesn’t involve the courtroom and is less expensive and time-consuming. A contested divorce is when people have disputes about the terms of divorce. A contested divorce usually comes about with disputes around children and spousal support. Each party would have a lawyer, and a judge would oversee the case, which costs more time and money. Mediation and arbitration may be necessary when divorce is part of both categories.
Types of Property
State law labels property as separate or marital, also known as community property. The classification of property dictates how assets will be divided. Separate property means you solely own things, such as inheritances, gifts, or assets you had before your marriage. Your paycheck is usually part of marital property but not a pension vested before the marriage. Community property is everything you receive or buy during the marriage, including pay from a job or a joint checking account. A house is usually part of community property, but there are exceptions.
Agreements VS Trial
Divorces end up in the courtroom because disputes occur while listing property or scheduling children. You’ll save time and money when you and your partner can agree on dividing assets and payments. You can divide everything however you see fit as long as both parties agree, but a judge may not sign off if the agreement seems unfair. Once a divorce involves lawyers, a judge handles the final division of assets between the parties.
The general rules for divorce are similar throughout the USA, but some laws differ from state to state. Most states define assets as separate or marital. Remember the laws of divorce for your state when dividing your assets. Some states consider separate property assets before marriage, and some keep assets separate even after marriage. Many states, such as Florida, use equitable distribution which means assets are divided in a way that is deemed fair and equitable. A judge will take into consideration many factors when determining equitable distribution including, the ages of spouses, length of marriage, future earning potentials and property owned by the married couple.
Divide Assets During Divorce
Trying to divide your assets before getting lawyers and going to the courtroom will save time and money. The first thing to do is write a list of all your belongings. Both people should include everything they own jointly and separately. Agree upon the personal objects that have no significant value and leave them off the list. Try to agree on the values of the property, but assets such as houses or businesses can be complex. Agree upon an authority to value the more complex assets for you.
Find the logical owners for each asset once your list is complete. Start with the most expensive assets and move down the list to see how far you get without a dispute. The court will usually approve the agreement once you and your partner agree on the divided property list. The court may interfere if no lawyers help and one person receives much less than half of the assets. Courts will find the agreement unfair.
Dealing With Debts
Debt during your marriage can include credit cards, taxes, car payments and mortgages. If you took the debt together, you’ll probably have to split the debt along with the property. A divorce agreement can give the debt to one person, but the creditors will still have a contract with both parties. If a judge tells your partner to pay the joint credit card debt and miss a payment, the creditors will come after you for the money. The situation becomes more complex since you would go to court to have your spouse reimburse you. The easiest way to resolve the issue is to close joint accounts and remove your partner from credit cards.