Dividing Assets and Debts in Divorce
If you and your spouse have made the decision to divorce, you must divide the property, assets, and debts that the two of you acquired during your marriage. Try to reach an agreement on these issues directly. If you are unable to agree, the court has the authority to assign property, assets, and debts to each of you at the time of divorce.
What assets does the court have authority to divide?
The court can divide a couple’s “marital property” (most property acquired by either spouse during the marriage, regardless of who holds official “title” to the property), although there are exceptions. Marital property can include:
- The family home;
- Other real estate;
- Bank accounts;
- Investment accounts;
- Personal items; and
- Most pension plans and retirement accounts.
In addition, debts you and your spouse acquired after the date of marriage and before the date of divorce must be divided or assigned to one person or the other.
Are there assets or property that cannot be divided?
Yes. The court will not divide any property that is “non-marital,” although there are exceptions. Non-marital property may include property either spouse:
- Acquired before the marriage;
- Inherited during the marriage;
- Received as a gift during the marriage; or
- Acquired after a decree of judicial separation.
Non-marital property may also include property you and your spouse have agreed to exclude from marital property through a valid agreement, and any increase in the value of non-marital property during the marriage.
How is marital property divided?
Ideally, marital property is divided by agreement between you and your spouse.
If you do not already have an agreement, you and your spouse will have an opportunity to come to an agreement through family matters mediation.
Mediation is an informal process in which a specially-trained person appointed by the court (the mediator) listens to both sides and helps the parties reach a mutually acceptable decision. The mediator does not take sides or decide who is right.
You must file and exchange Financial Statements (FM-043) before you go to mediation. If mediation does not resolve all issues, the court will divide assets and debts at the final hearing, based on evidence you and your spouse present about the property.
If you and your spouse do not have any financial issues in dispute, you may file a Certificate in Lieu of Financial Statement (FM-042).
What factors does the court consider when dividing marital property?
The court considers many factors when deciding how to divide marital property, including the contribution of each spouse. Contributions can include being a homemaker in addition to financial and other contributions.
The court will divide your property “equitably,” which means fairly, based upon the specific circumstances of your family. Equitable division of marital property does not necessarily mean that property will be divided equally. Equitable division also does not necessarily depend upon which spouse paid for things.
Can I ask the court to change how property was divided at a later time?
No. Although other portions of a divorce judgment may be modified (changed) at a later time, the division of property cannot. See Changing or Enforcing an Order in a Family Matters Case.