Marital Property – Real Estate

For many couples, their home represents one of their most valuable marital assets. For the purposes of a divorce, its current fair market value will be offset by the current balance of any mortgage, home equity loan, or other liability encumbering it; the couple’s equity in the marital home is what is important.

If the couple has any school aged children living in the marital home, the marital home is considered much more than an asset because it is a home base for the children. Generally speaking, a court is unwilling to disrupt the children significantly to divide the equity in the marital home between divorcing parents unless it will simply not be affordable after the parties separate. In such cases, a court is likely to defer the division of the equity in the marital home until the last child graduates from high school or attains the age of 18 or to offset the equity against some other asset to be taken by the parent who leaves the marital home.

Other real estate owned by a couple can be divided at the time of the divorce without delay. Again, it is the equity (fair market value less any mortgages or other encumbrances) which is important.

Marital Property – Retirement Accounts

Retirement accounts such as pensions, tax-deferred savings (401Ks, 403Bs, and IRAs), and tax-deferred annuities can also be divided to achieve the required equitable division of marital assets. Through the use of Qualified Domestic Relations Orders (QDROs) and letters of instructions, such accounts can be allocated between a divorcing couple without the income tax liability normally associated with an early withdrawal from a retirement account.

Marital Property – Personal Belongings

During the course of a marriage, a couple will probably acquire many personal belongings, including motor vehicles, furniture, jewelry, electronic equipment, tools, and many other items. At the time of the marriage, some of these belongings may be very valuable (such as a relatively new car not encumbered by a loan) and others may no longer be worth much (such as a 20-year old kitchen set). Neither courts nor attorneys really want to get into the minutia of deciding who gets what unless the couple cannot or will not work out the division themselves. There are a few general principles to keep in mind: items used by any children living in the home are likely to remain there for their use after the couple separates (their needs come before the desires of the parents) and the division should, taking into account all of the other assets being divided, be equitable.

Marital Property – Liabilities

Marital debt must also be considered in the equitable division of marital assets and liabilities. It is not important whose name is on a particular loan, credit card, or store charge; what matters is whether it was used for the benefit of the family as a whole or for that of the individual person. Thus, credit charges related to a family vacation will be considered marital while those related to a trip to the casino by one of the parties will not.