Divorce Property Settlement Laws

In legal terms, a divorce refers to a court procedure that dissolves the legal marriage between two spouses. All states have their own laws regarding divorce and the divorce process, and the process will likely look a bit different for every divorcing couple because of their specific circumstances.

However, in general, the divorce process involves many steps that each spouse must be involved in. This is because if any requirements for obtaining a legal divorce are missing, it could affect the validity of the divorce later on.

In order to understand how property is settled after divorce, it is important to understand what the divorce process entails. Generally, the divorce process can be divided into the following stages:

• Separation: One spouse will generally move out of the marital home and live apart from their partner while awaiting their divorce decree. Separation may be temporary, or it may involve formally filing for legal separation. In fact, some states will only allow a divorce filing if the couple has been physically separated for a period of time, but most states do not require couples to file for legal separation prior to filing for divorce;
• Filing a Petition: One spouse may file for divorce by completing appropriate court forms and paying the filing fee, which must be done in the district court of the state of residence;
• Notification: Once the petition or complaint has been filed, the other spouse must be notified or “served” with the divorce papers. From then, the spouse has 20-30 days to respond. If the non filing spouse fails to do so, a judge will generally grant the filing spouse’s petition;
• Temporary or Preliminary Hearing: This is an initial meeting between the spouses, their attorneys, and the judge in order to determine preliminary matters. The purpose of this meeting is to resolve matters that need immediate addressing, such as temporary child support or custody, requesting the exclusive use of the marital residence, and requesting instructions regarding insurance;
• Negotiations, Mediation, and Agreements: At this point the parties may attempt to resolve their issues through alternative dispute resolution methods, so as to resolve some issues outside of court. Finalizing an agreement regarding property distribution may be done during this time, and then submitted to the judge for approval when the trial actually begins; and
• Trial: If the parties cannot reach an agreement through negotiating, they will need to address these issues in a trial. Typical divorce trials settle issues such as establishing grounds for divorce and settling financial disputes, as well as property division.

How Is Property Distributed in a Divorce Settlement?

If the divorcing couple holds property that was shared during their marriage together, that property must be divided in the divorce proceedings. In general, property that was owned by one spouse before the marriage remains their property. How property acquired over the course of the marriage is divided is determined by whether the couple is divorcing in a community property state, or a non community property state.

In community property states, all property of a married person is classified as either community property or the separate property of one spouse. Community property is owned equally by both spouses and is generally divided equally between the divorcing spouses. Each spouse keeps their separate property. Community property states include:

• Arizona;
• California;
• Idaho;
• Louisiana;
• Nevada;
• New Mexico;
• Texas;
• Washington; and
• Wisconsin.

In all other states not listed above, assets and earnings that were accumulated during the marriage are divided equitably. In order to determine what is fair, the court will consider the financial situation that each spouse will be in once the divorce has been finalized. Other factors that may be considered could include the earning potential of each spouse as well as the duration of the marriage.

Any separate property belonging to one spouse cannot be considered to be community property. Separate property includes:

• Any property owned in one spouse’s name prior to marriage;
• Gifts and inheritances given to one specific spouse;
• Personal injury awards received by one specific spouse; and
• Pension proceeds that vested prior to the marriage.

What Else Should I Know About Property Settlement in Divorce?

A couple may purchase property with a combination of community and separate property. An example of this would be when a person primarily uses the inheritance they received prior to marriage in order to purchase a home, but also uses earnings from both them and their spouse to purchase the home. This transaction uses both community and separate property. In such a case, this property would typically become community property and is divided equally between both spouses.

Although assets and earnings obtained over the course of the marriage are divided equitably in a divorce. However, there are a few exceptions, including:

• Misappropriation, or when one spouse acquires assets or earnings unjustly prior to the divorce;
• Debts, as debts are considered to the obligation of the spouse that the debt belongs to;
• Tort liability, or if either spouse has a civil suit against them that would in no way benefit the couple as a community; and
• Recoveries from a personal injury lawsuit not attributable to community property.

Do I Need an Attorney for Divorce Property Settlement?

Dividing property during divorce proceedings can quickly become complicated, especially since state laws vary on the matter. Thus, if you are contemplating or actively going through divorce, it is in your best interests to consult with a divorce attorney.

A divorce attorney in your area can tell you what your state’s laws are regarding divorce property settlement, as well as represent you in court as needed.