Division of assets, properties, and debts that accompany a divorce case can be an additional worry-filled and taxing experience for divorcing couples, especially if no pre-nuptial agreement was entered into and, more so, if the spouses can not come to agreeable terms. This scenario would particularly be a concern to one of the spouses who chose to take care of the household over pursuing his or her professional career.
Dividing a divorcing couple’s wealth and debts is one related concern that will directly affect each of the spouse’s style of living right after the divorce is complete. Thus, this is one really sensitive issue as it will mean laying down of all finances to enable the judge (handling the divorce case) to make a fair decision on who gets which property and asset and how much debt each of the spouses will have to pay.
Before making any decisions, however, the court will first need to establish which properties and assets are subject to division, meaning, which are non-marital and marital (acquired during marriage). Properties and assets include employer-sponsored 401K or retirement savings plan, retirement and pension plans, life insurance, deferred compensation, commissions and bonuses, mutual funds, stocks and bonds, saving accounts, vehicles, antiques and art, among others. The marital home may be temporarily exempt from the division as it is usually awarded to the custodial parent (if the couple has a child/children) but only until the child finishes high school or turns 18.
Some of the other factors considered by the court in dividing property and assets are length of marriage, the income and/or property contributed (by each of the spouses) into the marriage, each of the spouse’s earning capability and income, their health, ages, and their standard of living during marriage.
Not all states are the same with regard to how their local courts divide property and assets. Unless changes have been made, the 50-50 rule division still holds true in nine states (California, Louisiana, Washington, Arizona, Wisconsin, Idaho, Texas, Nevada and New Mexico). All other 41 states make an equitable distribution, the basis of which is reasonableness and fairness.