Property Division in Uncontested Divorce
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If you have determined your main goals for the divorce like we suggested
in our divorce negotiation
tips, then you should have a pretty good idea of what you need in
the property division. A lot of times during divorce, having as much
cash on hand as possible is an important goal. It's a good idea to look
at your state's guidelines for dividing up property, because it might
help you if you get stuck while negotiating, and generally adhering
to the guidelines will give you more confidence that the agreement is
fair and will be accepted. The courts are usually inclined to accept
the parties' property settlement as long as they don't find any signs
of fraud or coercion. At the same time, the courts can't protect you,
so if your agreement isn't fair, you're out of luck. Make sure you understand
and are happy with the terms of your divorce before you file the papers
with the court. If you use Help Yourself Divorce
to prepare your divorce paperwork, we'll make sure your agreement
adheres to the court's rules, and we put your agreement into terms the
court will understand, we can't give you legal advice or comment on
individual circumstances. This is where you need to be your own advocate.
And if you need, you can have an attorney review your agreement before
filing. An attorney is there to protect your rights, if that's what
you need.
Every state has specific clauses in their statutes determining how
marital and non-marital property will be classified, and determining
how your property will be divided in a divorce. The guidelines will
be similar across the states, but there are still unique differences
that you should be aware of. Check your
state's statutes if you're not sure. Generally, most property accumulated
during the marriage is considered marital property. There are some exceptions.
For example, gifts or inheritances are usually considered separate property,
although each state's laws slightly varies. In community property states,
marital property is divided 50/50 unless there is an extraordinary circumstance
why it should not be. In equitable distribution states, property is
divided in a fair, but not necessarily equal, manner. Here is a list
of community property states:
Just like with other divorce issues, property division is one you will
probably be happier with if you are able to settle on your own rather
than having the court decide how your property will be split.
When deciding what to do with your property, you should think about
your financial situation and your priorities. If you have a lot of marital
debt (especially credit card debt), you might want to sell anything
you can, and use the money to pay off those debts. Credit card debt
can take years to pay off if you just make the minimum payments. During
that time, if you're both legally responsible for the debt and you've
agreed that your spouse will pay it off, the credit card companies might
still come after you if your spouse doesn't pay. They're not a party
to your divorce, so your final decree isn't always binding with them.
You should call your debtors to see if you're legally responsible for
the debt. If so, take that into consideration when dividing the property
and debts. If you have a mortgage or car loans that are in both names,
you might see if you can refinance. There will probably be a fee for
doing this, but you might actually save money if you can get a lower
interest rate. Also, you don't have to worry about your spouse not paying
the debt if the loan is in both names. If the peace of mind is worth
the cost to you, go ahead and check out your options.
There are a couple of things you can do if you're not able to pay off
the debts or refinance the loans. However, while some of these options
might provide some protection, they might not be legally binding. You
might want to speak with an attorney to see if there's anything else
you can do for more legal protection. One thing you can do is write
to your creditors to inform them of the divorce and ask to take your
name off the account. Even if they won't do that, you may be able to
have them close the account or refuse to authorize any more charges
without your permission. Where possible, close any accounts that are
in both your names.
If you still have debt left over at the time of the divorce, you'll
need to figure out who will pay it. Perhaps one person can pay off all
debt in exchange for more property. You should think of who benefited
most from the debt. If it's a car loan, for example... who drove the
car the most? If it's a credit card debt, think of who made the most
charges or who most used the items that were purchased.
The key in property settlement is to be reasonable. Maybe you can pay
off your credit cards by selling your car and getting a less expensive
model. Money is often tight during a divorce, and it's possible you'll
need to make some sacrifices. It's important to look at the big picture,
to decide what you can afford to keep and what makes the most sense
financially. It's critical to plan and keep track of everything. If
your spouse handled all your finances during the marriage and you were
in the dark, you'll need a complete inventory of all your assets, debts,
and expenses, so you can quickly get up to date.
Here's a list of typical assets
in a divorce and examples for valuing and dividing them, to help
you get a clearer picture of what you might be looking at.
