How Do You Financially Separate?

0
558
How Do You Financially Separate

Legal separation or divorce is often disruptive. This includes the division of the property the couple shares. It is a common misconception that everything the couple owns is divided 50-50 when they split. Instead, courts often divide assets among the divorcing couple using the equitable distribution or community property system. Here is more information on how financial separation works. 

The Impact Of Divorce On Property Division

Property division is one of the most commonly contested matters in divorces. While the divorcing couple should reach an agreement on this matter among themselves, if they cannot do so, a family court judge will give a ruling depending on several factors, including the type of divorce. 

Contested Divorce 

In contested divorces, both parties cannot reach an agreement on crucial matters regarding the separation or divorce, such as the division of assets. These types of divorces are generally taken to court and can involve a formal trial. Typically, a legal separation lawyer represents each spouse during a contested divorce, and a judge can give the final ruling on matters related to the separation or divorce. These types of divorces can often be costly and time-consuming. 

Uncontested Divorce 

Uncontested divorces cost less time and money, are generally more straightforward, and do not require a formal trial. In this type of divorce, the couple settles their differences through mutual agreement and divides their assets. Typically, in an uncontested divorce, the couple is not required to separate in a specific manner financially. Instead, they can divide the property in whichever way they prefer. Finally, the couple reaches a settlement and submits it to the court for approval. 

- Advertisement -

How Does The Court Divide Property During A Divorce?

State Laws 

State laws have great significance when it comes to property division. Most states follow the community property method, where everything the spouses accumulate during their marriage would be considered community property and can be divided 50-50 among spouses during the divorce. Community property can include wages accumulated during the marriage, especially those deposited into a joint account, furniture, personal belongings, houses, and vehicles. However, the assets of each spouse that they inherited or possessed before the marriage or after the divorce is considered separate property and may not be divided between the spouses during the divorce. 

In some states, courts follow the equitable distribution method when dividing assets during a divorce. In equitable distribution, the courts do not necessarily divide the assets equally among the spouses; instead, they consider multiple factors and may grant each spouse a specific percentage of the total value of the property. These factors can include the standard of living both spouses enjoyed during the marriage, earning potential of each spouse, how each spouse contributed to acquiring marital property, and the other spouse’s career. 

Dividing Real Estate In a Divorce

Generally, anything either spouse owns as a result of inheritance or gift or acquired before marriage is considered separate property. Still, one of the most complicated aspects of property division is whether the house the couple resided in during their marriage would be considered separate property or community property. 

If the couple bought the house with a combination of their community and separate funds, the house could be considered community or marital property under state laws. In such cases, the judge can decide which spouse gets the house following the divorce. This decision is based on factors including which spouse is the primary caregiver for their children or if there is a significant income disparity between the spouses.   

However, if the couple does not share children, there can be more chances of the house owner retaining possession during and after the divorce. In some cases, especially in equitable distribution states, one spouse can be granted the house while the other gets granted some other property of relatively less value depending on their income and earning potential.     

Debt

One pressing matter of divorce is the division of debt. Mainly, courts recognize and divide debt in the same way as marital property. For example, if one spouse goes into debt before marriage, they can be solely responsible for paying it off after the divorce. On the other hand, if the debt was acquired during the marriage, the court can divide it among the spouses. The judge can consider some factors when dividing debt during the divorce, such as each spouse’s contribution to incurring the debt and their ability to pay it off.

Previous articleHow To See Pending Deposits On Cash App? Unveiling The Process   
Next articleDoes Taco Bell Take American Express? Unveiling Taco Bell’s Payment Policies