When you walk down the aisle and get married, you don't usually stop to consider things like who will end up with the marital home if you decide to split up later. However, these concerns quickly enter your mind when you're in the midst of a divorce.
In many cases, spouses have no idea who gets what in divorce. Even more so, people don't have a clue how they should divide up everything from their furniture to retirement accounts in a way that is fair for everyone. This can cause a lot of headaches and fights along the way.
Whether you realize it or not, though, it's not that hard to decide who gets what in your divorce as long as you understand the following things:
- Who Gets What In Divorce?
- Community Property vs. Separate Property
- Factors That Dictate Property Division
- Does The Wife Always Get Half in a Divorce?
- Equitable Division
- Child Custody Impacts Division of Assets
- Splitting Marital Assets Fairly
Divorce can be very emotional. But, if you approach splitting assets with a logical mind, you'll find that the whole process is made easier.
Who Gets What In Divorce?
Many couples have a hard time dividing their assets during divorce proceedings. Between bank accounts, personal property, retirement accounts, and the family home, it can be a lot to figure out. Then there's any joint debt to divide on top of all the assets... the list goes on and on.
In an ideal scenario, spouses would have a clear-cut prenuptial agreement that explains what each spouse will receive and what each one will give up. However, most couples don't have this type of document. So what do you do?
Luckily, it's relatively easy to figure out who gets what once you understand what assets and debts belong to the marital estate and what factors determine how property is divided.
Community Property vs. Separate Property
In most divorce cases, lawyers will have each partner determine what items and assets are considered marital property (assets obtained during the marriage) and which are regarded as separate property (assets acquired outside of the marriage).
In a nutshell, community property (also called marital property) is anything you and your spouse either earned or acquired during your marriage. This includes property like the marital home or rental property, bank accounts, and any items within your home purchased after you said, "I do."
Furthermore, retirement accounts, pension plans, and investments obtained during the marriage count as marital property. This is the case even if the account only lists one person's name.
Separate property is anything you or your spouse obtained outside of the marriage. This can include non-marital property you owned before your wedding day (like a car) or any stocks or bonds you purchased before marriage.
Furthermore, it can include non-marital assets like inheritance directed to you specifically. It may include gifts from friends and family or sentimental family heirlooms. Engagement and wedding rings are also not considered marital assets, meaning you don't have to add those into your calculations.
Understanding which bucket each item falls under can help you begin to make sense of who gets what. It also lets you see what you're entitled to without your spouse contesting the division of assets.
Factors That Dictate Property Division
As you can imagine, the division of marital property and separate property isn't the only factor that dictates who gets what in a divorce. A lot boils down to the type of divorce you have and where you live.
For example, you can go through an uncontested divorce, a contested divorce that goes to court, or land somewhere in the middle. In an uncontested divorce, you and your spouse will agree to a division of marital assets you both feel is fair.
If you can't agree on anything and go to court, a judge will determine what they think is an equitable division of property.
But how does the judge decide how to divide your personal property? Well, it's based on where you live.
Within the United States, state laws dictate whether your state is a community property state or an equitable distribution state. In community property states, all marital property is split evenly, or 50/50. States like Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin fall into this category.
Equitable distribution states the assets are divided fairly but not necessarily equally. In this division, many factors are considered, such as each spouse's earning potential and financial state after the divorce, the length of the marriage, and the contributions each spouse made to the marital home. The majority of US states split property based on equitable distribution.
In the case of equitable distribution, a spouse whose lifelong earning potential is lower may receive more cash upfront or spousal support to help offset the income differential. Similarly, if one parent is identified as the primary custodial parent, they may get to keep the marital home but only need to pay out a small percentage of the equity in the home.
Does The Wife Always Get Half in a Divorce?
Many people assume that each spouse gets half of everything in the divorce. However, that's not always the case. As mentioned above, there are many factors that go into determining what an equitable division of assets is for a couple, and a court order will usually look at the big picture before dividing any property.
So, before you assume you or your spouse will get half of everything, make sure you understand some of the other considerations that impact payouts.
In most cases, courts work towards an equitable division of assets and debts when processing a divorce case. The judge will look at how long you were married, what you each brought into the marriage, what you each contributed to each other during the marriage, and your earning potential after legal separation.
Unfortunately, an equitable division is hard to predict. In some cases, the marital residence and other real estate may be weighted more heavily since the property maintains steady appreciation values. Inversely, stocks are less predictable and may mean you get more in other areas.
Even if you decide to settle out of court, though, mediators and others who provide you with legal advice will usually help you work towards equitable division. This is especially true if your lifetime earning potential is less than your spouse's, as they will be able to "bounce back" more quickly. Equitable division is also an excellent way to go if you hold a fair amount of marital debt.
However, keep in mind that dividing your property is usually just based on the numbers. Most judges don't factor in the emotional pain of infidelity or domestic violence when determining who gets what.
Child Custody Impacts Division of Assets
Not every couple shares children. However, those who do will have to factor in items related to custody and child support during the divorce process.
Some people consider their children to be the biggest asset they gained during the marriage. However, children also cost money to raise, and you may need additional help beyond what is given to you as part of your state's predetermined child support calculations.
So, in many cases, child custody can also impact who gets what in divorce.
If you earn less than your spouse but will have the children most of the time, you may get extra cash from your spouse each month. This is called spousal maintenance or spousal support. It's usually a monthly payment you receive, like child support. But, you can use it however you see fit.
For example, you may use child support to go towards your mortgage payments but use spousal support to pay for a family vacation. If in doubt, a divorce attorney can explain what you can and can't use each form of support for.
Splitting Marital Assets Fairly
Unless you're going for blood, chances are you want to find a middle ground in your divorce. You want to split things in a way that feels fair. But you don't want to be taken advantage of either.
So, what's the best approach?
In many cases, it's best if you look for ways to find a middle ground. This means you'll need to talk to your spouse about dividing things. It's not always fun, but it can be helpful.
Before you go to court, sit down and do the following:
- Make a list of all your property and debts.
- Determine the value of everything listed.
- Decide who should logically take each item listed (including the debt).
- Get someone outside of the marriage to look it over.
If you can agree with your spouse on how to divide everything, you can save yourself time and money. Sometimes, you may have a small filing fee if you settle everything out of court.
Divorce can be very emotional. But, if you approach this one thing with a logical mind, you may find that it's relatively easy to decide who gets what in the divorce. Just remember, money is just money, and property is just property. What matters most is that you can live comfortably and you're happy.