In a divorce, or marriage dissolution, proceeding, the marriage of the parties is terminated and other related issues, including child custody, child support and visitation, spousal support (alimony) and property and debt division are decided. In the past, courts would not grant couples a divorce unless one of the spouses could establish sufficient grounds (such as cruelty, desertion, adultery, nonsupport or neglect, alcoholism, drug addiction, insanity or criminal conviction) to terminate the marriage. Today, most divorces are considered “no-fault,” that is, the parties can terminate their marriages on the grounds of incompatibility, irreconcilable differences or an irretrievable breakdown of the marital relationship. However, in some states, fault may still be relevant in determining issues of custody and visitation, child support, spousal maintenance or property distribution.
Property distribution may be strongly contested in a divorce action. Commonly distributed property includes real estate, personal property, cash, bank accounts, stocks, bonds, ownership interests in family businesses and retirement benefits. There are two main methods of property distribution, equitable-distribution or community property. The majority of the states are equitable-distribution states.
In equitable-distribution states, courts divide a divorcing couple’s assets in a fair and equitable manner based on the circumstances in the particular case. Some states consider the fault of one party in dividing the property, but others specifically exclude marital misconduct from consideration when deciding property-distribution issues. The court will equitably divide all marital property, which generally consists of all property acquired during the couple’s marriage. Although non-marital property, including property acquired before marriage, gifts to one spouse and property inherited by one spouse are usually not divided between the spouses, the amount of non-marital assets held by each party may affect the court’s distribution of marital property. The remaining states are community-property states. In these states, each of the spouses has a one-half interest in all of the property acquired during the marriage. It is presumed that all property acquired by either spouse or both of them during the marriage belongs to the community, unless proven otherwise. As in equitable-distribution states, exceptions may be made for gifts, inheritances and the property each party brought to the marriage.
When property is evenly/equitably divided, each asset is not necessarily split between the parties. Rather, each party is given his or her fair share of the total package. One spouse may receive more property than the other receives, but make up the difference through cash payments. Alternatively, in some cases, the actual distribution may take place at a future date. This may occur when there is significant equity in the family home, but a sale is not in order because the custodial parent wishes to live in the home until all of the children are raised. In such cases, the equity is determined at the time of divorce or separation, and the shares are then calculated, but the money does not change hands until the house is actually sold.
Recent developments in property-distribution law include the recognition of a homemaker spouse’s contribution to the increase in value of a family business, and the wage-earner spouse’s contribution to the other spouse’s education and professional degree. Courts are now awarding greater shares of family businesses to wives who managed the household so their husbands could tend to their business, and dividing the value of a professional degree or practice, such as law or medicine, between both spouses if one supported the other financially while the necessary education and experience were obtained. Property and debt distribution in a divorce can be a difficult process, and the advice of an experienced family law lawyer can help to expedite the process.
Preparing to Meet with Your Family Law Attorney
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