Legal Separation of Assets

Most states have laws that provide for the equitable division of assets.

If you are thinking about filing for divorce, you are probably wondering what will happen to your assets, the assets acquired before marriage and the assets acquired during the marriage. Well, you may get to hold on to those assets you had before getting married, but the court will decide what happens to those assets acquired during your marriage. When separating assets, the court attempts to divide the property in a fair manner, and many times being fair does not mean dividing the marital property in half.

Marital Property

Almost all assets acquired by a husband and wife during a marriage qualify as marital property. Any property acquired by either party will be classified as marital property until the day the divorce is granted. Gifts and inheritances created for the benefit of one spouse will be excluded from being classed as marital property.

Division of Property

According to FindLaw.com, "States applying principles of equitable distribution view marriage as a shared enterprise in which both spouses usually contribute significantly to the acquisition and preservation of property." In community property states, the property is always divided 50-50, but in equitable distribution states, the court does not always view a 50-50 split of property as fair.

Equitable Distribution

Under equitable distribution, courts consider several factors when dividing a couple's assets. If one spouse has more nonmarital property than the other, the court may give more of the marital property to the spouse with the least amount of wealth. If one spouse has significantly more earning power than the other spouse, the court may use that fact to award more of the marital property to the spouse with less earning power.

Factors

The court also may take into account the person who earned the property under equitable distribution. If a soon-to-be ex-wife and ex-husband own a family business, the court would likely award the business to the spouse who operated the business. When one party was a homemaker and lost earning potential as a result, the court may award that spouse more property when dividing assets.

Other factors the court would consider are waste and dissipation, fault, duration of the marriage, the age and health of each spouse, tax consequences and prenuptial agreements. There are 41 equitable division states or territories as of 2010.

Community Property

The remaining 10 states are community property states. These states are Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington and Wisconsin. Dividing property in these states appears to be simple because all the marital property is split 50-50. Not only are all the assets split 50-50, but all debts are split 50-50 as well.

References

• FindLaw: Factors Considered in Dividing Property
• Equality in Marriage Institute: Who Gets What Where