Don't Overlook These Marital Property Issues
Divorce can often be complex and issues like property and children can affect the time and ease with which things move along. Some people give a high priority to settling differences concerning custody, child support, and visitation issues and rightly so. That emphasis, however, often leaves the couple unprepared to cope with complex marital property issues. Read on for a brief exploration of marital property that some couples overlook.
1. Know What Is and Is Not Considered Marital Property
You might be confused about what is legally considered marital property. Generally, if you bought something as a married couple, it is considered marital property. Conversely, if you owned something before you got married, it's not marital property. Anything gifted or inherited, your life insurance disbursements, gambling winnings are not considered marital property. Surprisingly, retirement accounts are marital property.
2. Understand Community Property and Equitable Distribution
Most states look at marital property using equitable distribution. This means the property belongs to the person who took ownership of it during the marriage. For example, if one spouse gives the other a dog, the spouse who took care of the pet the most may be declared the owner. With equitable distribution, marital property may become a contentious issue with the judge having to decide ownership based on who bought it, who used it, etc. Some things that are determined to belong equally to each party may be forced to sell it and divide it fifty/fifty.
Fewer states use community property laws to determine marital property. While this method can be easier to work with it also may be perceived as unfair. The rules of community property split all marital property down the middle, regardless of who owned it or paid for it. For example, if you own a home and you were the primary breadwinner who paid the mortgage on it, it is still 50% owned by the other spouse. This helps spouses who did not work and buy property to retain a higher level of financial security after divorce. Unfortunately, debt is also split down the middle, no matter who incurred it.
Don't Overlook These Assets
Divorcing couples would do well to make an inventory of all assets and let their divorce lawyers determine ownership based on state rules. Be sure not to leave the following:
- Items you think are of sentimental value only
- Items you thought you owned when you wed
- Accounts in which both you and your spouse contributed funds
- Gifts between spouses
- Business ownership
- Items that belong to your spouse or that you have no interest in owning
- Tax refunds due
To help clear up any confusion about marital property, speak to marriage dissolution services.