In our last post, we talked about the basic differences between separate and marital property. (Read it here).
The next logical question is, how exactly do all those assets get distributed? How do I know that I will get a fair settlement?
We’re going to be discussing the ways that different states approach the division of property and how you can make the process easier on yourself.
Community vs. Equitable Distribution States
There are two types of laws regarding how the courts divide assets related to divorce. Depending on the law, a state is considered either a “community property state” or an “equitable distribution state.”
States categorized as either Equitable distribution or Community property.
Community Property States
Community property states divide marital property 50/50 between both spouses and each spouse keeps their separate property. These states will not divide separate property. However, any separate and marital property that are commingled are subject to the 50/50 rule.
Unfortunately, dividing property this way can be seen as unfair by both parties because the 50/50 rule is very strict.
Equitable Distribution States
The rest of the states are considered “equitable distribution states,” meaning that marital property is divided fairly but not necessarily equally. Rather than splitting everything 50/50, certain factors are taken into consideration when deciding the division of property. According to LawShelf Educational Media, some of these considerations include:
- Marital fault if fault grounds for divorce are present;
- Duration of the marriage;
- Age, education, background, and earning capacities of both parties;
- The standard of living of each party during the marriage;
- The disparity of earning capacities between the two spouses;
- The child custody provisions;
- The needs of each spouse;
- Each spouse’s opportunity to acquire future income and assets
Equitable distribution laws also allow for the court to order separate property be considered in order to make the settlement fair.
If it is an amicable divorce, sitting down with your partner and deciding how to divide your various assets yourselves is a better, more efficient, and cheaper option than taking it to court.
It would be better to avoid these kinds of situations!
You could also consider mediation where both parties are represented but work together to reach a settlement without costly litigation. With an attorney and Certified Divorce Financial Analyst, you can navigate the complexities of property division, reach a fair settlement, and stay out of the courtroom.
Overall, to save yourself time and money, it is encouraged that you try to find a way to divide your assets without going to court and try to reach an amicable solution.
Divorce Financial Solutions is available to help and answer any questions you may have about this process.