When parties get divorced, all property acquired during the marriage must be divided between them. Property division is one of the most important issues in a marriage dissolution. There are all types of property that have to be distributed, including real estate, automobiles, bank accounts, stocks, bonds, retirement accounts, employment benefits, furniture, recreational vehicles, and personal effects.
Property division is a three step process:
1. Setting Aside Separate Property. The first thing that the parties or the court must do is to set aside each parties’ separate property. Generally speaking, separate property consists of all property owned by a person before they are married, together with property they received during the marriage by gift or inheritance. Any property exchanged for separate property is also separate property, provided that the exchange can be traced. Any property received after a decree of separation is separate property. The characterization of property as separate or marital is very important because the court cannot award one spouses’ separate property to the other spouse. Some exceptions apply, so if you have any questions, you should consult with an attorney.
2. Valuation. Once the separate property is set aside, the next step is to determine the value of the remaining marital property.
Property is valued as of the date of divorce or the date of the hearing to divide the property, whichever occurs first. It is easy to determine the value of some items of property. For instance, we can easily determine the value of shares of stock by the stock exchange price on the date of divorce. The value of other items of property is much more subjective. It may be necessary to obtain a formal opinion of value from a professional appraiser. Different people may have widely different views on the value of property. In one divorce I handled, the wife’s expert valued the husband’s business at two million dollars, while the husband’s expert valued it at zero. Ultimately, the judge will decide how much the property is worth. Each party must be prepared to assert what they believe the property is worth, and to prove that value with appropriate experts and sources.
3. Equitable Division. Once the separate property has been set aside and the marital property has been valued, it is time to distribute the marital property between the parties. Marital property does not have to be divided equally. Rather, the court will make an equitable division of the property, as it deems is just consider all facts and circumstances, including several facts set forth in the law. The court has wide discretion to determine what is fair in each case.
It is technically incorrect to say “I am entitled to half of ‘X’.” You are entitled to a fair portion of ‘X.’ That could be exactly one-half of ‘X,’ it could be more than half, or it could be less than half. This is why it is important for you to be prepared to persuade the judge why it is fair for you to receive the portion of property you are seeking.
Property division is both simple and complex. The general rules are simple. The application of the facts and exceptions to the rules is complex. It is important to have the right attorney advise and advocate on your behalf so that you can truly receive a fair portion of the marital property. Call Kirk Garner today for a free consultation.