Many divorce and separation lawsuits involve the legal concept of “marital assets.” In general, it refers to any property obtained when a couple is lawfully married. It usually doesn’t matter which spouse or partner holds title to the property; as long as it was acquired during the marriage by either party, it might be considered a marital asset for divorce purposes.
Marital assets and other family law concepts like community property and shared property may be used interchangeably. This terminology for divorce property may have various definitions in some states.
Despite variations by state, marital assets encompass any possessions either spouse has accumulated throughout the marriage. This can include assets held solely in the name of one spouse, such as real estate, bank accounts, and retirement funds, depending on your state.
For instance, California is a community property state, meaning all assets acquired during a marriage are marital property.
Property obtained before marriage is treated as separate property in several common law states. This can apply to inheritances, gifts received, and property that one spouse earned during the marriage but never used to benefit the other spouse or marriage. When one spouse uses their inheritance to buy the family house, things can get complicated.
Some states, like Indiana, use a “one pot” strategy; however, it is less frequent. Even assets amassed prior to the marriage are included in the marital estate. However, when deciding how to divide the property in these situations, the courts will take into account when and how it was acquired and will typically give the property back to the spouse who originally owned it.
How Do the Marital Assets Change After a Divorce Is Filed?
Marital assets are effectively frozen. The Petition for Dissolution of Marriage is the first action in a divorce. A Summons is also filed with that document, and many of them include temporary restraining orders (TROs) pertaining to marital property. A TRO on real estate forbids a spouse from hiding or selling property. If preliminary agreements are not automatically included with initial files, many courts will issue them upon an attorney’s request.
Soon after the petition is filed, most courts require each party to provide some kind of Financial Disclosure. A Financial Disclosure lists all of the party’s assets, regardless of whether they are considered joint or individual. This not only gives the court a clear picture of the parties’ financial situation at the time of separation while also assisting in ensuring that all assets are identified and distributed in accordance with applicable state law. This shields one spouse against attempts by the other to spend down assets.
Selling marital property, giving it as a gift, or using marital money to buy expensive items would be against the TRO and could land you in legal trouble.
Once a divorce petition is filed, it’s critical to understand the difference between marital assets and separate assets. Before a Petition for Dissolution of Marriage is filed, any money held in bank accounts, whether individually or jointly, is regarded as marital property. Any income you get after the petition filing date is regarded as an individual asset.
Through agreement, one can get past the prohibition on selling marital property. Preliminary agreements between spouses are permitted. As an illustration, Henry and Wendy decide to keep their individual cars after getting divorced. Mary’s car is worth $8,000, compared to Bob’s $12,000 value. Each will be given a distribution from the total marital estate equivalent to the value of the car they each kept.
Since Henry and Wendy have already divided a portion of their marital wealth, they are free to proceed as they like. Mary is free to sell her car and spend the money on whatever she wants.
Prior to any finalization, it is often simple to agree on what to do with other smaller objects, such as furniture and personal belongings. Always consult with a lawyer before disposing of any marital property.
Does My House Fit Within This?
Yes. The TRO would cover the marital house because it is usually one of the largest equitable assets in a marriage. There are several approaches to managing a married house during a divorce, but the following are a few typical ones:
- The parties may decide that one spouse will maintain the marital residence: Both parties must agree upon the fair market value, and whoever keeps the house is credited with obtaining that amount as part of the marital estate.
- Before the divorce is finalized, the parties can opt to sell the marital residence: Any proceeds from the sale would then be held in trust, typically by one of the parties’ attorneys, until the divorce is concluded.
In a final hearing, the parties can leave the division of the house up to the judges. It’s crucial to remember that courts will typically force the parties to sell the home and divide the assets fairly if they are unable to come to an agreement.
Is It Important Whether My Spouse Is “At-Fault”?
The short answer to the question of whether you can sell your marital property is no. The spouse who is not at fault will typically receive a larger portion of the marital estate in at-fault jurisdictions, but this does not give you carte blanche to sell everything.
The property division in no-fault divorce states typically does not consider either spouse’s actions throughout the marriage.
However, if one spouse significantly contributed to the loss of assets, most judges will consider that. This happens when one spouse misuses, squanders, consumes, donates, mismanages, converts, or otherwise harms the marital property. If those costs can be demonstrated, courts will typically change the property division to consider them.
What Kinds of Assets Are Marital?
Typical illustrations of marital assets include:
- Houses and other types of property
- Cars
- Bonds, stocks, insurance, and pension plans
- A rise in the worth of the couple’s current assets
Items such as the following are not considered marital assets:
- Items obtained prior to the marriage
- Items inherited (especially if only one person is listed as the beneficiary)
- Property that the partners have agreed to be treated separately
The categorization of marital assets is a major topic in many prenuptial agreements and other marriage papers. Once more, in a divorce, the parties typically split the property equally.
Family Mediation
If there is a significant disagreement about marital assets, the couple may decide to request family mediation. Here, the parties consent to settle any disputes out of court, typically with the help of a mediator. A court may also order mediation to cut down on overall court time. Working collaboratively to develop a strategy for splitting marital assets during mediation can help the parties save money. It might also be integrated into the general divorce procedure.
The parties will still probably need to report to the court and may still need their own attorneys, even if mediation is in place. As a result, each party will receive a more equitable share of the marital estate.
Do I Require Legal Assistance With Marital Assets?
Depending on the state, marital assets may be governed by very varied regulations and legislation. You may need to consult an expert family lawyer for guidance if you have any questions or legal concerns with marital assets.
Your lawyer can assist in giving you the legal representation and direction required for the appropriate handling of marital assets.
