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How Are Assets Divided in a Divorce?

How Are Assets Divided in a Divorce?

You may be asking yourself how assets are divided in a divorce. In most states, the judge divides the property according to what he or she seems to be fair. This does not necessarily mean that you will get equal shares of each asset. Some states also allow couples to opt into a community property system by identifying certain assets as community property.

Community property

One important issue in a divorce is how to divide community property. If you and your spouse own a business together, the business will most likely be community property. However, if you and your spouse started it before the marriage, it will most likely be separate property. If you and your spouse worked together to increase the value of the business, you might be entitled to a share of the profits.

Separate property

In a divorce, separate property is the assets that a spouse has owned before and during the marriage. These include gifts received from third parties, property acquired during the marriage, and inheritance. Separate property does not include debts, which are generally joint responsibilities in a marriage.

Gifts

In a divorce, gifts are often split between spouses. Gifts may be marital property or separate property, and the court will consider the date and use of the gift in determining how the gift should be divided. In certain cases, marital property may include gifts received from third parties.

Bequests

If you have a bequest to your ex-spouse in your estate plan, you may want to rewrite that bequest after the divorce. If you do not, the bequest may not be distributed the way you intended. This is because every state has different laws regarding estate planning and distribution.

Decrees

Divorce decrees cover several areas, including the division of debt, property, child custody and visitation, and alimony. Alimony, also known as spousal support, is usually awarded to the spouse who has made more money during the marriage. It is determined by factors such as the roles both spouses played during the marriage and the parties’ prior standard of living. In addition, the divorce judge may also consider factors such as the age and health of the parties.

Court hearings

When determining how much each party should be awarded, the court must look at a variety of factors, including the value of the property, the standard of living, and the economic circumstances of the parties. While most states do not consider fault in the distribution of assets, some do. A spouse’s fault may be a factor if the divorce was a result of unreasonable behavior, such as wasting money on drugs or alcohol. Also, the length of the marriage may be a factor in the division of assets. In addition, a spouse’s age and health may also be considered during the asset division hearings. Lastly, a spouse’s contribution to the household may be considered in the property division.

Mediation

If you want to divide your assets fairly, mediation can be the right option. In this process, both parties must provide clear financial statements that show each item and its account numbers. Failure to follow the guidelines will delay the process and add to the cost. Also, you must consider marital debt as it can affect the division of assets.

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