In the event of divorce, what was once referred to as “our” is divided into “his” and “hers.” While you can easily agree to not live together, what happens to the things that you have worked so hard to acquire?
When you have been married for a long time and are convinced that you found the love of your life, you then discover that she is not the one for you.
Whatever the reason might be, whether you have a cheating spouse, or find out that they are not the one, there are many reasons for divorce.
It is, however, important to note that dividing the marital assets can be one of the most challenging tasks in a divorce. This article will teach you how to split the assets fairly, enabling your divorce process to run more smoothly.
Can you Divorce without splitting Assets?
Yes. Divorce can be handled without splitting assets as long as you have your separate assets rather than community assets
After a divorce, you may have the right to keep certain assets, and your right to have them will depend on whether they are legally your separate property or if they are “community property” belonging to your marriage.
After a divorce, you are entitled to keep your property. The situation can become more complicated when it comes to retaining assets that are considered marital property.
Because you and your spouse are both equally entitled to marital assets, you will be able to keep a marital asset for yourself only if you purchase your spouse’s share of the asset.
For such a buyout, you don’t need cash. Alternatively, you may be able to use other marital assets, such as a car or retirement fund, to buy out shares.
What kind of Assets do you own?
There are many issues surrounding the division of assets during a divorce One of the most common questions asked is, “Who gets the house?”
A state’s law will typically determine the division of your property. It relies on whether you live in a separate property or community property state:
- A separate asset belongs only to one spouse, such as something you owned before you got married, a gift or inheritance specifically given to you, or the proceeds of a pension that vested before you got married.
- Every item you earned or acquired during your marriage is considered community property (for example, money from your job that you placed in a joint checking account and used to pay bills or debts during your marriage). If you purchase an asset with separate and community funds, it is generally referred to as community property.
What’s the Difference Between Community Property and Separate Property?
The general rule is that if you live in a community property state or if you choose to treat some or all of your property as community property (which is possible in a small number of states), both spouses own equally all property acquired during the marriage.
On the other hand, there are exceptions to the general rule. Some properties may be classified as separate property or as commingled property. You can use the following general descriptions to help you classify your property.
Community property includes:
- all income earned by either spouse during the marriage
- all items purchased with money either spouse earns during the marriage
- separate property that has been mixed with community property to the point that it can’t be split out, and
- all debts incurred during the marriage, even when only one spouse signed the paperwork for the debt.
Separate property belongs to only one spouse. It can include property acquired before and during the marriage. It includes:
- assets held earlier in the marriage, gifts, and inheritances.
- Property owned by one of the parties before marriage
- gifts made to only one spouse during the marriage
- inheritances received by one spouse during the marriage
- personal injury awards received by one spouse during the marriage
- pension proceeds that vested (that the spouse became legally entitled to receive) before marriage
- property purchased with separate funds
- any business owned by one spouse before the marriage (a court might find that a portion of the business is community property if it increased in value during the marriage or both spouses worked in the business), and
- commingled separate property (separate property that is mixed with community property during the marriage).
How To Properly Spilt Assets When Divorcing
If both you and your spouse are planning to divide the property between yourselves, the following are some tips to get you started:
- List your belongings: It is important that you work together to make a list of all the items that you own together. Certainly, you can exclude items both of you agree have little value and are not of great importance to you.
- Value the property: It is better to agree on the value of anything that is worth more than a certain amount of money, such as $100 or $500. A property, a business, or anything else that might be hard to value should be evaluated by some outside authority you are comfortable with.
- Decide on the logical owner. Go through your main list and look at each item one at a time, and see if there is any reason for you to choose to give each property to one of your partners. Start with the most valuable items and see where you can take it.
- Get the judge’s approval. When you and your spouse agree on how to divide the property you own together, the court is normally going to approve the agreement that you have reached. The only exception to this is when a party who does not have a lawyer seems to have agreed to take a lot less than half of the property.
Couples have the ability to negotiate a settlement agreement in order to maintain control over how divorce assets and debts are divided.
Depending on the circumstances, some couples may be able to divide their property on their own by working together. Couples who need help to reach a settlement in divorce can benefit greatly from mediation.
The court often requires divorcing spouses to attend free or low-cost mediation. However, spouses can also hire a private mediator to help them through the process.
Finally, if you have decided to split your assets after a divorce then you may find this article to be helpful briefly or you may hire an attorney to help you further.