If you are going through divorce or expecting to go through the process soon, you must be wondering about the asset distribution process. The equitable division of assets during a divorce may range from the marital home, joint business venture, stocks, lotto winnings, and more. Therefore, it is ideal to know about the process of fair distribution before diving into the process.
What Assets Are Included in the Equitable Distribution?
The marital house, a company, checking accounts, share options, and retirement money are examples of things that the court may include in the equitable distribution. In principle, marital property is defined as property obtained by one or both partners from the time of the marriage until the separation is filed.
Property obtained before the wedding, such as inheritance, or property gained after the lodging of the divorce, are examples of separate property. To avoid being recognized as marital property, courts have decided that separate property must be maintained distinctly and not permitted to be mixed. The following are some examples of equitable asset division:
- Farms, houses, condos, and commercial buildings;
- Bank accounts;
- Automobiles, yachts, motorbikes, motorhomes, and ATVs;
- Furnishings, jewels, and antiques;
- Investment accounts;
- Pension benefits and retirement accounts;
- Life insurance money.
What Are Assets That Are Not Included in Equitable Distribution?
Inherited wealth, assets obtained previous to the wedding, and property acquired after the divorce is filed are not considered. To avoid being labeled as marital property, courts have decided that independent assets must be maintained distinctly and not permitted to be mixed. Furthermore, if independent property improves during the marriage, it becomes marital property as well.
Courts will evaluate if any added value to the assets resulted from price volatility or a result of one partner’s inputs and endeavors toward the investment’s development. This will help them with deciding if the incremental value is susceptible to allocation and equitable distribution or not.
How Are Assets Valued in Divorce?
When splitting possessions in a separation, courts must give value to the marital assets. This stage can be as simple as reviewing bank accounts or as difficult as hiring an assessor to evaluate estate or an attorney to value a firm or analyzing corporate perks like retained salary, stock grants, or deferred compensation.
How Does the Judge Divide the Marital Assets in Equitable Distribution in Divorce?
After determining and valuing the marital assets, the court is given broad authority to choose the fairest method to split the assets in a divorce. Courts will take into account the following elements in compliance with equitable distribution laws:
- The length of the relationship;
- The partners’ ages, emotional and financial condition;
- Each party’s earnings or assets contributed to the relationship;
- the standard of life;
- Any binding contract by the spouses on an asset distribution plan;
- The financial conditions of each partner at the moment the asset partition takes effect;
- Each party’s wealth and financial prospects;
- Each side’s contributions to the other’s schooling, employment, or potential earnings;
- Each side’s input to the purchase, dispersion, maintenance, devaluation, or development in the quantity or worth of marital assets, as well as a party’s contribution as a homemaker;
- The tax implications of each side’s planned allocation;
- The estate’s valuation;
- The need that a spouse with primary custody of a child own or inhabit the marital dwelling, as well as the use or possess household goods;
- The partners’ obligations and responsibilities;
- Some other elements that the law deems significant.
What Are Some Important Details Regarding Asset Division in Divorces?
There is no such thing as a 50-50 division in a divorce when it comes to asset splitting. This is frequently the case, although it is not necessarily true. What sorts of situations aren’t generally divided 50/50? There must be something unusual going on, such as a previously held item that has increased owing to both partners’ activities throughout the relationship or excluded resources such as a gift.
One of the goals of this law is to understand the importance of a homemaker, stay-at-home mom, or dad in what authorities have deemed a joint venture.
As a result, if one person worked for all of the marital property while the other decided to stay home and cared for the kids, a judge would regard the relationship as a collaboration and infer that the marital wealth was gained via both couples’ labor.
In a separation, the name under which the property was purchased has no bearing on how the property is split. If an account was opened in the husband’s name during the relationship, it might still be deemed a marital asset and entitled to equitable division. The wife has always had an equal entitlement to the wealth obtained during the marriage. Finally, it is worth noting that courts have ruled that blame is not considered in determining how assets are divided during a divorce.
How Can Meditation Help?
Equitable distribution refers to the practice of distributing marital assets after divorce. To save time and resources and assist legal efficiency, several states have introduced legislation requiring equitable distribution issues to go to mediation before being adjudicated in courts.
When equitable distribution issues reach the courts, conciliation is now compulsory in certain jurisdictions. The participants can pick their individual impartial arbitrator if they concur. If they can’t agree about who should be the intermediary, a court will choose one for everyone. The participants are also accountable for the arbitration fees.
If a court finds that a person is impoverished, which implies they seem unable to pay for arbitration, the intermediary will give their assistance free of charge.
The spouses will strike a deal on the distribution of their marital assets if the arbitration is effective and achieves its goal. Both sides, as well as the intermediary, will honor the contract in writing.
Once the settlement is signed, the intermediary will tell the authorities that the matter has been resolved, and there will be no reason to go to court. If the mediation fails to provide a resolution, the mediator will file a report with the courts, and the matter will continue to trial.
What Is the Bottom Line Here?
The mediation process can help save a lot of time, money, and resources in the long run. Moreover, it saves couples from going to harsh trials and court judgments, and they can decide independently. It is slowly becoming the new norm in divorce cases.
If you need more information, you can contact Stange Law Firm today and get started with your legal processes in the right way.
