When you are dividing assets, you need to understand what constitutes an asset. In a community property state, all of your income, property and other investments that were earned during the marriage by either spouse is owned by each person equally.
The court will determine any and all property that is earned by either person in the marriage community property. Any additional property that is not considered community property will be treated as separate property.
Any property that either spouse brought into the marriage is considered separate property and is owned by that person after the marriage is dissolved. This can include, but is not limited to, an inheritance from a family member, a home purchased before marriage or a settlement from a lawsuit that occurred before the marriage.
When you are ready to divide the assets from the marriage, sit down and make a list of all of your community property. On your list, be sure to list the value of all assets, including bank and retirement account balances, homes, vehicles and investments.
When you are dividing your assets, you both need to make sure to do so in the fairest way possible. This will be different for everyone, as many circumstances are different. In some cases, it is not ideal to divide everything evenly down the line. For instance, you will not be able to divide a physical item, such as a vehicle.
You can, however, provide one spouse with the vehicle while the other spouse gets the equivalent amount of the vehicle in cash or another asset of equal value.
If you are divorcing on good terms, you can sit down and do this yourselves and then submit your provisions to the court. However, these decisions will be made by the judge if you are not able to evenly and fairly divide your assets on your own.
When you file for divorce, your marital debt, or debt that was incurred during the marriage, does not just go away. You are both going to be responsible for paying it. The debt can be anything from vehicle loans, home mortgages or credit card debt.
In most states, some types of debt will be declared community property in a marriage. Any debt that was incurred before the marriage is typically going to be considered separate property and is the sole responsibility of the owner of the debt.
When you are dividing your debt, you need to write out each debt and what is owed on each. You can work together to decide who will pay what and then submit a proposal to the court. Ultimately, the court will decide how each debt is paid and who will be responsible for it. Having a plan in place beforehand, however, is always ideal.
Be sure to fairly divide the debt. For instance, if one spouse gets the home, he or she should also get the mortgage debt.
If you are going through a divorce, please contact Cotto Law Firm P.C for assistance. A lawyer can help make sure that finances are divided evenly and fairly.
One of the most frustrating and messiest parts of a divorce is dealing with the separation of finances, property and debt. If you and your former spouse are able to civilly determine who will get what financial aspects, the process can be simpler. You will only need to provide the court with a marital settlement agreement that details your agreement.
However, if you are unable to work together to deal with the financials of your partnership, the court will get involved to make the decisions for you. The following is some information you will need to know if you are facing a separation of assets and debt in a divorce.