Property Division upon Divorce

Question 1

How is property divided upon divorce?

Answer 1

Most states follow equitable distribution of marital property

Question 2

What are the steps to equitably divide property?

Answer 2

1. Identify the divisible property = find the marital property
2. Value it = determined at the date of separation
3. Divide it = based on fair circumstances (not always 50/50)

Question 3

What is marital property

Answer 3

Jointly owned and jointly acquired through the labor
of the parties (i.e., property acquired during the marriage)

Question 4

What is separate property

Answer 4

Property owned before marriage, acquired after dissolution of the marriage,

OR

acquired by gift or inheritance to one spouse during the marriage

Question 5

What if separate property value increases during the marriage?

Answer 5

If increase is due to passive appreciation → increase = separate property

If increase is due to labor during the marriage → increase = marital
property

Question 6

Commingled and Transmitted Property Rule

Answer 6

If separate property can be traced then treat part as separate and part as marital.

If tracing is not possible then the property is marital

Question 7

Rules for Marital Residence

Answer 7

If purchased before marriage but marital earnings used to pay off mortgage and build equity in the house then part separate and part marital, and can reimburse marital estate for mortgage payments

Question 8

Pension/Retirement Accounts

Answer 8

Does not matter if they are vested or unvested they are subject to equitable distribution on contributions during the marriage

Not post separation increases or premarital contributions though.

Question 9

Stock Options

Answer 9

Granted during marriage = marital property

Earned as employment compensation then it depends on when acquired and when the work for which the option was received was preformed

Question 10

Professional Degrees and Licenses

Answer 10

Generally, not subject to equitable division

Question 11

Personal Injury Claims- “lost wages” and “future wages or expenses”

Answer 11

Lost wages/medical expenses during the marriage = marital property

Future wages or expenses = separate property

Question 12

Lottery winnings and debts

Answer 12

During marriage = marital property

Before or after marriage = separate property

Question 13

What are the factors considered in determining equitable division

Answer 13

Financial status of need of the parties

AND

Contribution during the marriage