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How to Split Marital Assets During Divorce

How to Split Marital Assets During Divorce

Getting married is something that most people spend their lives dreaming about. Young girls and boys alike grow up wondering what their wedding will be like. Pinterest has made it easier than ever to plan every detail of your wedding, from the dress to the centerpieces on the tables.


You spend most of your life dreaming up the perfect day and the perfect spouse, but nobody ever plans to get divorced. You might have signed a prenuptial agreement, but you most likely aren't versed in divorce terms. Let's be honest; no one wants to invite that kind of energy into their life. So, you just ignore it and hope that your marriage will withstand the test of time.

Even if you signed a prenup, it doesn't promise you half of everything down to the exact dollar amount. Most of the time, one person walks away with more than the other. This might not seem fair, and it's one of the biggest reasons why divorces take so long to finalize.

Throughout this article, you will not only learn tips for splitting marital assets during a divorce, but you will also learn more about why it's nearly impossible to split things 50/50.

There's More Than One Type of Divorce

There's More Than One Type of Divorce
There's More Than One Type of Divorce

The overwhelming majority of couples going through a divorce, don't have the luxury of choosing which type of divorce they would like to pursue. This is largely due to the fact that most couples are unwilling to work together during such times. It might even come as a surprise, but there are many types of divorce.

The different types of divorce include:

  • Fault and No-Fault Divorce
  • Uncontested Divorce
  • Arbitration
  • Mediation
  • Collaborative Divorce
  • Default Divorce
  • Summary Divorce
  • Same-Sex Divorce
  • Contested Divorce

Now that all fifty states allow same-sex marriage, there is legal recourse you can take to end your marriage, civil union, or domestic partnership formally. It uses the same forms and actions that heterosexual couples use.

By far, the two most common divorce types are uncontested and contested divorce.

An uncontested divorce is when both parties are able to come to a mutual agreement and file the papers to the court without a formal hearing. This type of divorce will save you thousands in legal fees if you and your spouse can manage to agree on all terms of the divorce.

A contested divorce is what comes to mind when most people think of divorce. Partly the reason for this is due to its portrayal on television and in movies. When both parties are unable to agree to terms like property and children, this is the type of divorce that will ensue.

In a contested divorce, each party is represented by an attorney, and everything is done in front of a judge. This type of divorce costs the most and takes the longest to finalize.

The type of divorce that is right for you and your spouse depends solely on your willingness to work together and come to an agreement. The more you disagree on, the divorce that is right for you might change.

Separate Vs. Community Property

Separate Vs. Community Property
Separate Vs. Community Property

The division of property in a divorce is the number one reason couples end up going to trial. For many couples, it is hard to answer the big question without some form of counsel.

What's the big question you might be asking? — Who gets the house?

Before this question can be answered, you have to know whether you live in a separate property state or a community property state. As mentioned above, this is one thing many people don't bother to look into when they get married. Then, they get divorced, and one person might expect to keep the house without knowing what type of state they live in.

  • Separate Property States:
    • Any property owned prior to the marriage
    • An inheritance received before the marriage
    • A gift received from a third party that is valuable
    • Compensation received from a personal work injury or related

Not all separate property states follow these guidelines, but these are generally accepted.

  • Community (Marital) Property States:
    • All property that was acquired during the marriage, even if it's titled in your spouse's name

Some things that are considered marital property are:

  • Pension Plans
  • 401Ks
  • IRAs
  • Deferred Compensation
  • Stock Options
  • Bonuses
  • Commissions
  • Country Club Memberships
  • Life Insurance
  • Real Estate
  • Tax Refunds

In regards to separate property that increased in value during the marriage, things can get a little hairy. States will determine if the property's value is considered active or passive appreciation to decide if the property should be considered marital property.

Essentially, active appreciation is when your spouse actively helped in the increase due to buying supplies or even watching the kids while you worked. Passive appreciation is due to outside forces like inflation.

However, there are definitely arguments that can be made one way or another. If your assets become confusing in this nature, it might be wise to get some advice from a third party counsel or attorney.

Understanding Equitable Distribution

Understanding Equitable Distribution
Understanding Equitable Distribution

If you don't live in one of the nine Community Property States, then you live in an Equitable Distribution State.

The nine Community Property states are:

  • Arizona
  • California
  • Idaho
  • Louisiana
  • Nevada
  • New Mexico
  • Texas
  • Washington
  • Wisconsin

In Equitable Distribution states, the settlement doesn't have to be equal necessarily. However, they should always be equitable and fair.

Common factors considered in an Equitable Distribution state are:

  • The means to maintain a certain lifestyle for the custodial parent and child
  • How long the marriage lasted
  • Each spouse's financial situation when the divorce is finalized
  •  Income and property brought into the marriage by both parties
  • The earning potential of both parties
  • A certain standard of living brought on by the marriage
  • The age and emotional state of both parties

The court can also consider other factors it deems relevant to the case. As you can imagine, this makes things even trickier. Not to mention, it will cost you more time and money by the end of it all.

It is also crucial to remember that debts typically get divided during a divorce as well. However, Community Property States and Equitable Distribution States have different ways of dividing debts. The best thing to do is to educate yourself on the division of debts before you get married.

No matter how perfect your future spouse might seem, it is always wise to protect yourself with education.

Hopefully, these tips can help you determine which type of divorce is best for you and your spouse. Divorce doesn’t have to be as messy as most people think, though. Below are a few tips to help you maintain a civil relationship until your divorce is finalized. It could even help you maintain a friendship afterward as well.

How to Come to a Mutual Agreement

How to Come to a Mutual Agreement
How to Come to a Mutual Agreement

The ability to remain civil with your spouse during a divorce can make all the world's difference. It is actually the number one way to ensure both the assets are split as fairly as possible. When lawyers have to get involved, it only makes the situation messier and takes longer than it needs to.

Remember, take as long as you need to maintain a civil and respectful relationship. You will both likely go through a whole mess of emotions, so remaining civil might feel nearly impossible. However, if you two can manage to do so, it will save you a lot of time and money in the end.

There are, of course, some situations in which it is best to remain separate throughout the divorce. Understand that hiring a lawyer is not the same as admitting defeat. Hiring a lawyer can be a symbol of strength. It was a moment in time when you dared to speak up for what was right and protect yourself from the many financial games associated with uncivil divorce.

Undoubtedly, divorces can get messy sometimes. This is especially true if you two have a long list of assets and cannot have civil discussions regarding how to divide them. Luckily, there are multiple types of divorce to help you agree to the cheapest way possible.

Of course, the cheapest option is to remain civil and finalize the divorce without attorneys or a court hearing.

Be sure to protect yourself from the beginning and learn about splitting marital assets during a divorce before you even get married.