In this post, guest contributor, Ben Hartwig, talks about the most contentious aspects of divorce from a U.S. perspective and he highlights a few crucial things to know nowadays.
Divorce rarely takes place without some disagreement and dispute.
Dissolving a relationship, perhaps one that lasted many years and involves custody of children along with shared property, accounts, and sentimental items, is a challenging process that divorce records don’t begin to describe.
Divorce records are public documents in the U.S., but what is found at the state department of health or the county courthouse is likely to contain only the names of those involved, dates of marriage and divorce, and other basic descriptive information.
Divorce agreements, which are generally not public records, layout in detail how property is to be divided.
Therein lies the rub.
Ways of distributing property
Divorce statutes vary widely across the country, with states requiring vastly different terms of separation before divorce, fees, or other hurdles before a union can be dissolved.
Yet there’s one commonality: most states now require equitable distribution of property in a divorce, with only a handful (about 9) states seeking to split property and assets equally.
Equitable distribution means that each spouse is likely to be assigned valuable assets as well as liabilities according to his or her contribution to the relationship and household – as well as his or her ability to pay (liabilities).
While articles refer to “judges” deciding property distribution, in fact, this is most often hammered out in challenging meetings of attorneys and divorcing spouses, then presented in the form of a divorce agreement at the time the divorce is granted by the judge.
Although the definition varies from state to state, “Equitable” is generally defined as a calculation that takes into account each spouse’s contribution to the household, including childcare and housework.
During the process of distribution or disposal of property, it must be determined which asset or liability was acquired or incurred during the course of the marriage.
Lists of assets are compiled and arrangements made for establishing the value of each.
Many times an individual will have ownership of a property or an object of value prior to the marriage, and the law takes that into account, generally allowing the individual to retain ownership unless it was expressly changed to co-ownership.
Pensions and retirement funds pose an interesting exercise in determining any portion that was accrued prior to the marriage and dividing the remainder.
Considering the complexity of the distribution process, states and state-funded organizations have started issuing guidelines to help citizens navigate through the severe complexity of divorce and property distribution.
For instance, the Florida Bar association provides a list of seven steps to the process of equitable distribution of marital property.
This process can take place after the divorce is granted.
Some of the factors that determine one’s share include:
- the duration of the marriage;
- any interruption of cessation of a party’s education or career in deference to the spouse’s goals or advancement;
- the contribution each spouse made to acquire the asset;
- any intentional depletion or destruction of property or assets within two years of the divorce, but
- marital asset distribution is to be completed without consideration of any alimony set by the divorce agreement.
Inheritances are a particularly tricky part of marital asset distribution.
In these situations, attorneys look into who the money was left to and what was done with it after it was inherited to determine whether it’s a shared asset.
Keeping an inheritance separate from marital assets is important, as a lawsuit against one spouse might drain it, and divorce would certainly divide it.
Even using inheritance to purchase half of a home is risky as the property may lose value, or the inheritor may pass away leaving the sum tied up in a home that then becomes the sole property of the surviving spouse.
A cautionary tale of marital asset distribution is that of a couple who battled before a roster of family court judges for some five years, liquidating their possessions to pay attorneys.
The husband allegedly refused to pay a court-ordered maintenance fee to his wife, who quibbled about the value of assets that were being depleted by their court appearances, which a journalist described as costing $1,200 an hour.
Over time, their legal bills topped $150,000 and the disputes became ever more acrimonious.