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Division Challenge
Divorce Advice: Assets And Property Division (Part 4 Of 4)
When a couple is divorcing, dealing with the issue of dividing up assets and property can be a difficult and stressful process. Property division can occur in one of two ways. Often, a couple that is divorcing will decide how to divide their property and assets themselves (perhaps with the help of a mediator). If the individuals are unable to reach an agreement, the matter will go to trial. A judge will consider all of the evidence presented and will use state law to divide the property.
There are two legal theories that govern how marital property is divided: community property and equitable distribution. In a few states, all property of a married person is classified as either community property (owned equally by both spouses) or the separate property of one spouse. In the event of a divorce, community property is generally divided equally between the spouses, while each spouse keeps his or her separate property. However, a majority of states use the law of equitable distribution, under which all assets and earnings acquired during marriage are equitably divided. In equitable distribution states, the court determines a fair and reasonable distribution that may be more than or less than 50% of any asset to either party.
Tip #1: Take this process very seriously, as most property division agreements are final. It can be very difficult to get out of or change a property division arrangement to which both parties have agreed or a court has ordered. In most states, there is an established period of time after a court enters its decision on property division during which one of the parties can request that the court reconsider its decision, but these requests are often denied. In general, a judge will reevaluate a property division arrangement only if one spouse engaged in fraud, hid assets, or some substantial mistake was made. If your case involves neither fraud nor a mistake but you still want to challenge the court's division of property, your only option is to file an appeal, which can be very costly.
Tip #2: Beware of hidden assets. There are a number of ways in which a spouse may hide, undervalue, or disguise assets. Some of the most common ways that assets are hidden include income that is unreported on tax returns and financial statements, custodial accounts set up in the name of a child, cash in the form of travelers' checks, retirement accounts, and collusion with an employer to delay bonuses, stock options, or raises until after the property division has been finalized. It can be very difficult to find these items and get the proof needed to show the court that they exist. Litigation may provide helpful formal discovery procedures, such as depositions. Hiring a forensic accountant or a private investigator are additional steps that can be taken to uncover hidden assets.
Tip #3: Be forthright and honest when it comes to your own assets, and make sure you list them all on your case information statement. "It's important to list all your assets. Just because you think your spouse may not be entitled to an asset is not a reason not to list it because when you sign the case information statement, you certify that everything is true. If there is a trial, it can be used in cross examination… To deliberately leave something out is probably one of the biggest mistakes that you can make," explains New Jersey divorce lawyer Bonny Reiss. "If you think your spouse isn't entitled to share in an asset, there's a place to say why, at least in a word or two, but make sure you list the asset," Reiss adds.
Divorce cases involve many different types of issues, including preparing for your divorce, child custody and visitation, child support, and alimony all of which have been addressed in this series.
For more divorce advice, refer back to Parts 1, 2, and 3 of this series:
Part 1: Divorce Advice: Preparing for Your Divorce
Part 2: Divorce Advice: Child Custody and Child Visitation
Part 3: Divorce Advice: Child Support and Alimony
About the Author
Liz Ryan is a Writing and Content Specialist for Lawyer Central. Visit Lawyer Central's Divorce Resources for legal information about divorce and to find an experienced divorce lawyer. Discuss divorce and related issues on the Law Forum.
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