In a divorce, marital property is divided between the spouses. The first consideration is to identify marital property, as opposed to non-marital property (which is not divided). Marital property consists of real estate, bank accounts, pensions, household furnishings, investments and any other assets acquired during the marriage. Marital property does not include one spouse’s inheritance, gifts to that spouse or compensation for one spouse’s injuries. Marital debts are defined in the same way and must be divided in the divorce decree, usually without regard to differences in incomes between the parties. The presumption is that the marital property and debt is to be divided equally but that can be adjusted. Car loans are assigned to whichever spouse receives the car, for example. However, it usually does not matter to the divorce court that a credit card used in the marriage was only signed by one of the spouses or that medical bills are only in the name of one of the spouses.
Often, the most complex issue is what to do about the marital residence and the mortgage loan that goes with it. The parties or the court can decide to sell it and the consequences of sale divided equally. Otherwise, one of the spouses can keep the house by becoming solely responsible for the mortgage debt and, if there’s any equity in the property, pay one-half of the equity to
the other spouse.
Another difficult issue is dividing pensions before they go into ‘pay-out’ status due to retirement. The divorce court can issue a Qualified Domestic Relations Order (QDRO) binding upon the pension administrator to divide the pension (or as much of it as was earned during the marriage) in half so that each spouse is entitled, upon retirement to a portion of the pension. If each spouse has
a pension, they can be offset and only the difference is divided in the QDRO.
Knowing these and other guidelines, helps divorcing spouses to reach a settlement sooner and avoids lengthy divorce trials. Experienced divorce lawyers are familiar with these guidelines and assist their clients to reach a divorce settlement without a trial.
If you have questions or need representation regarding a divorce, please contact our office at 937.339.3939. Appointments are usually available within 24 hours of your call.