Navigating Asset Division in Divorce: What You Need to Know

When couples consider divorce, one of the main problems is how their assets will be divided. This depends heavily on state laws. In some states, nearly all property obtained during the marriage is considered communal and thus divisible upon divorce. Other states opt for an "equitable distribution" approach, where assets are divided fairly, but not necessarily equally, based on different factors.

What's Off Limits in Divorce?

Contrary to common belief, not many assets are "untouchable" in a divorce. Without agreements like prenuptial or postnuptial arrangements, most assets can be subject to division. This includes all property owned by either spouse, regardless of how or when it was acquired.

Dividing Real Estate

Real estate is typically divisible in divorce. Courts can order the sale of properties or restrict their sale if they're tied to financial support obligations. Even real estate owned outside your state can be subject to division if the court has jurisdiction over the owner.

Financial Assets: Bank Accounts to Bonds

Assets such as bank accounts, cryptocurrencies, stocks, and bonds are generally included in the marital estate, meaning they can be divided between spouses. Special cases, like accounts held in trust for children, aren't considered part of the marital estate.

Retirement Funds and Pensions

Retirement accounts and pensions are also divisible. One spouse can assign them a present value and buy them out, or their division can be deferred until the benefits are received.

See also: The Importance of Legal Assistance in Divorce Proceedings

Stock Options and Intellectual Property

Stock options earned during the marriage are subject to division. Intellectual properties like royalties and patents are likewise divisible, though their valuation can be complex.

Business and Professional Assets

Business interests are another key divisible asset in a divorce. Typically, the spouse running the business retains their interest, and other assets are allocated to balance this division. Special arrangements are needed if both spouses are involved in the business.

Personal and Unusual Assets

Most personal property is divisible, from pets to personal collections. Unique assets like lottery tickets or season tickets can be divided if obtained during the marriage.

Future Earnings and Gifts

Future earnings from things like inheritances or significant gifts can be considered when dividing assets, especially if these were anticipated and relied upon during the marriage.

Trust Interests and Short-term Marriages

Trust interests can be complex but are generally considered divisible if they are present and valuable. Short-term marriages often result in each spouse keeping more of their pre-marriage assets.

Educational Achievements and Social Security

While educational degrees aren't directly divisible, they can influence how other assets are divided based on each spouse's earning potential. Social Security benefits, however, cannot be divided due to federal law.

Children's Property

Assets owned by children are not divisible among the parents in a divorce. The court can reverse any transfer of assets to children to hide them from division.

Protecting Your Assets

Consider a prenuptial or postnuptial agreement to safeguard assets in a divorce. These contracts can clearly define which assets are personal and which are marital, helping ensure a smoother asset division. It's crucial to have an experienced family law attorney from P. A. Davis Law Office, LLC, handle drafting and negotiating these agreements.

For advice tailored to your situation, contact us today to book an appointment!