When a couple plans to divorce, the question of “who gets what?” is often front and foremost. The following information is a basic list of things to do to help answer the question about property division during divorce.
Basically, consensual and contractual are the specific terms that create the foundation for any division of assets and debts in divorce. Each state has its own set of rules by which it addresses property division. Generally, there are a few differences between states. Some common terms are community property and separate property, and equitable property division. Because there are differences in how these issues are handled by each state, it is important to determine what the specific rules for property are in the specific state where you are getting divorced.
It’s a good idea for couples to discuss these issues together if possible. Get things rolling by asking the basic question, “What assets do we have?” Start by making a list with columns.
Each item considered an asset should be listed, along with a complete description, what the current estimated value might be, when it was obtained, how it was obtained, and whose name it is listed under in any ownership records. Items should include real estate property, businesses, vehicles (recreational and otherwise), furniture, art, antiques, jewelry, outstanding loans payable to one of the parties, investment accounts, bank accounts, retirement accounts, cash on hand, and any other items of value belonging to either the husband or the wife.
After listing all the assets, list all the debts. Include all loans, credit card debts, mortgage debts, investment debts, business debts, school loans, and any other debts incurred and still outstanding for either the husband or the wife or both. It helps to get a current credit report for each party. It is a good idea to verify any open accounts as joint or separate.
Once you have your lists, evaluate what is most important to help keep each person as stable as possible during the transition from married to single life. Some issues up for discussion may be what is necessary to provide for an older spouse, or what may be necessary for a spouse who has never worked outside the home, or how to divide up a business or give one party a piece of real estate. These conversations are the basis for making equitable divisions of property.
You may need to have other conversations about where assets and debts originated. Were some of the assets already owned by one of the parties at the time of marriage and if so, how were those assets maintained during the marriage? Were assets inherited by one or the other spouse during the marriage, and if so, how was that inheritance used? The same discussion needs to take place regarding debts of each spouse when they were incurred and how they were handled during the marriage.
Once you have answered some questions, and found out what the rules are in your state, you will be able to better discuss how to divide the assets and debts incurred during the marriage. It helps to put facts on paper and look at them with an accountant’s eye, and then discuss compromises and options.
