Divorce is an emotional process. People grieve the end of a marriage, even if they recognize that divorce is their best option. The sorrow and anger people feel during the early stages of divorce may be exacerbated by the anxiety that comes from uncertainty.
With exceptions for people who have ironclad prenuptial agreements, those contemplating divorce are often unsure about what to expect. People generally understand that they have to divide their property with their spouses, but they may not know exactly how the courts divide marital property if they don’t settle.
Couples with pre-existing contracts and those who can agree on terms before going to court can control the property division process. Others may rely on family law judges to appropriately allocate the marital estate. What typically happens during litigated property division proceedings?
Judges divide assets and debts
The marital estate consists of any income the spouses earned during the marriage and any property they acquired with that income. It also includes any financial obligations originating during the marriage. Assets and debts held in the name of one spouse are often part of the marital estate. 401(k)s, credit cards and vehicles are among the assets that may theoretically belong to one spouse but are still subject to division during the divorce.
A judge reviews an inventory of assets provided by the spouses that outlines their resources and financial obligations. Typically, those disclosures include estimates of the value of assets and the amount owed to outside parties.
Judges also look at the circumstances of the marriage. Factors including the length of the marriage, the health of the spouses, the earning potential of each spouse, unpaid contributions to the household and even custody arrangements for children can influence how a judge divides marital property.
State statutes require an equitable distribution of marital assets. Their goal should be a fair outcome, which does not necessarily mean an even distribution of assets and debts. One spouse could potentially retain far more of the marital estate or become responsible for a larger portion of the couple’s shared debts.
Judges have the authority to make either spouse responsible for financial obligations and to grant them each certain assets. They can also potentially order the liquidation of certain assets as a means of facilitating a fair split of the marital estate. Spouses who dislike the unpredictable nature of contested property division may want to consider working together to settle asset division matters outside of court.
Learning the basics about divorce proceedings can help people plan for the future. Spouses intent on securing certain resources during property division may want to explore settling as an alternative to the unpredictability of litigating.