Divorce & Separation of Assets
According to the National Center for Health Statistics the divorce rate in this country is about 40 percent. This means many of us will experience the devastating emotional and financial costs of divorce. Dividing assets in a separation varies from simple to complex depending on the martial relationship and property. Having a plan in place and educating yourself on the laws in your state enables you act in your best interest.
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Preparation
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Personal financial losses in divorce are common, but there are many things you can do to protect yourself. Sit down and create a list of all marital property. The list will help you in negotiations and also give you a clear picture of what there is to divide. Next obtain a credit report and cancel all credit cards, which will help you create an inventory of all debts and also keep either party from running up new debt because of the pending divorce.
Property
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In most states, all of the property acquired during the marriage is considered community property and is split in half in the event of a divorce. This includes all marital assets, including retirement accounts, businesses owned, real estate and any investments. Professional degrees are also considered as property. If one person supported the other while attending college, he or she may receive a percentage of future earnings.
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Debt
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Handling debt accumulated in a marriage is also central to some divorce proceedings. There are a couple of options that couples have when dealing with debt. Selling all of the marital property to pay off debt is one option. If this is done, neither party has to worry about being stuck with debt from the other. The next option is to split the debt up evenly, but this option can be risky because although one party may agree to pay, if he does not fulfill his end of the bargain, you will still be liable.
Uncontested Divorce
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Dividing assets in an uncontested divorce requires less work and heartache than in a contested divorce because neither party is in disagreement on the conditions of the divorce. These conditions are negotiated and agreed upon by both parties, however in the end make sure that you are satisfied with the agreement. Courts will accept the agreement as long as there is no evidence of intimidation or persuasion.
Contested
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Division of property is more difficult in contested divorces because both parties do not agree on how to divide things. In these cases the courts will divide the property as it sees fit. However, even with the court dividing property the marital assets are still split 50/50. Contested divorces take much longer than uncontested divorces because it takes a large amount of time and resources to come to these decisions when both parties do not agree.
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References
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