In a Divorce proceeding, the Court has the power to “justly and equitably” award property. Therefore, it is extremely important to note that the Court does not automatically apportion property division at 50% to each party. In many cases, the interpretation of “just and equitable” has carried this meaning however, this is always subject to the specific circumstances of the Divorce case.
The Court has the authority to divide “marital property.” Therefore, it is helpful to develop a chart or summary of all of the marital assets as well as non-marital assets. Marital assets include anything of value that is accumulated after the date of marriage. This includes, but is not limited to cash, accounts, investments, pension, 401(k) plans, real estate, investment property, business interests, or personal property items. Anything that has value and that was accumulated after the date of marriage is considered marital property and is subject to division by the Court.
Non-marital property is property that was either brought into the marriage by one party (e.g. a vehicle that was owned outright by one spouse before he or she got married) or if the property was received as a result of an inheritance during the marriage or was given as an exclusive gift to that particular party during the marriage. It is important to note that the Court assumes that all property is marital unless one party establishes to the satisfaction of the Court that it has a valid non-marital claim. This is typically done by “tracing” (showing a chain of events along with supporting documentation that would lead the Court to believe that the property was non-marital in nature). It is also important that the non-marital property is not “commingled” with marital property. For example, if one party receives an inheritance of $10,000, to retain its non-marital nature, it should be separate and apart from any marital funds and should not be “commingled” in a joint account.
In determining issues relative to property and debt, one of the most popular misconceptions is that title (who is listed as the named owner of the property) is important. Whether it is a vehicle, a pension plan, a 401(k) plan or any other asset, title is not the controlling factor relative to dividing an asset. If it was accumulated during the marriage, it is marital property regardless of whose name it is titled under.
Another important consideration when analyzing and agreeing to a property division is that it is final. Once the Court signs a Divorce Decree, which gives an award of property to both sides, it is final. Absent extremely rare circumstances, it can never be changed.
When analyzing the property division, it is almost always a good idea to award an asset to a party who also is the debtor on that particular asset. For example, if one party is driving a Lexus motor vehicle and he/she is named on the loan or lease for that vehicle, he or she should be awarded that vehicle subject to the loan so that there is no confusion on the part of any party as to who will pay that particular debt.