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Divorce Basics Step 2 - Equitable Distribution.  

After determining the parental responsibility and timesharing of the divorcing spouses, the Court will move on to dividing up the marital assets and marital debts.  Of course, if there are no minor kids, this would be the first step.  Therefore, in considering your case, it's the next logical component to work out.  Before dividing up the marital assets and debt, we first need to determine what's marital and what's non-marital.  This is generally a straightforward process as most commonly it is undisputed amongst the parties as to what's marital and what's non-marital.  

It's easiest to determine what's not marital rather than the other way around.  Why?  Because any income you have from your employment during marriage is considered marital.  Therefore, anything that is purchased with that income is also marital.  Additionally, any assets titled in both parties' names is marital.  Assets given by one party to the other during marriage is marital.  And, cash comingled in the same account is also considered marital.  Often, that's everything.  But, there are exceptions and they can be significant, so it's important to understand.  

Here are the most common exceptions.  Gifts or inheritance received from people other than your spouse are considered non-marital, so long as you don't give them the gift.  So, if one spouse inherits $100,000 from Old Uncle Lou, it's non-marital property and not subject to division in the divorce.  However, if that spouse then puts the $100,000 into a joint bank account with the other spouse, there is a presumption that the transfer was a martial gift and, accordingly, that the property is marital.  This can be a challenging issue if the parties have no other assets prior to the inheritance.  

Property brought into the marriage.  Okay, so spouse one has a condo in her sole name prior to the marriage.  The parties then marry.  The parties then divorce.  Is the condo marital?  Probably not.  Remember, if it's brought into the marriage, it is non-marital until the condo owner makes it marital.  How does that happen?  She most commonly deeds her husband onto the deed.  Perhaps they lived there or perhaps it was the result of a conversation about fairness early in the marriage. Whatever the case, the spouse who brought the condo is likely a bit regretful about deeding the other spouse on.  That's because by doing so, we again have that legal presumption that the deed was a memorialization of a marital give.  It is difficult to overcome.  Now, the issue of whether the appreciation of the asset is marital is a bit more complicated and dependent more on how the property appreciated.  

Similar to the identification of martial assets, we do the same in identifying marital debt.  The methodology is the same.  Next, we set aside the non-marital assets and debt.  They are not subject to equitable distribution and the parties who own them simply take them free and clear of the other spouse.

Now onto dividing the marital assets and liabilities.  The legal presumption here is to divide them all 50/50.  That's an equal division based on value.  Many assets may have certain values, such as bank, investment and retirement accounts.  But many assets are subject to opinion.  Two reasonable people could value you a home or a car or a painting or a vase at completely different amounts.  In negotiating settlement, the parties either come to some agreement as to value, or they present evidence to the Court as to value.  In the end, the goal is generally to divide the assets down the middle which usually requires a cash equalization payment from one party to the other.  There are arguments for unequal distribution of assets, but due tot he presumption that we divide equally, they are often unsuccessful.  They are technical and many and will need to be the subject of another blog entry.  

These rules work regardless of the asset and liability.  Be it a horse, car, plane, stock, house, condo, pension, sick time, vacation time, etc.  This area of the law is defined by presumptions and exceptions. 

If you need to learn sooner than later, I suggest you call me!!  

By for now and please let me know if you have any questions about this entry or about family law matters generally.