One of the biggest questions in a divorce is generally who will get the kids. Second to that—and likely first, if the divorcing couple are childless—is who gets the property.
“Property” may cover real property and personal property (possessions, bank accounts, investments, etc.). The court usually determines what property is in play in a divorce proceeding by requiring the parties to complete financial disclosure statements listing all their sources of income, expenses, assets, and liabilities.
Back in the day, many states distributed property solely based on who held the title (if only one spouse, usually the husband, was on the title). In recent decades, things have changed. Most states now use a process known as “equitable distribution,” while 10 (Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin) use one known as “community property.”
“Equitable distribution” strives to distribute the property fairly by looking at a variety of factors. Those factors may include: substantial contribution to accumulation of the property, value of the property (both monetary and emotional), tax consequences of distribution, the parties’ needs, the duration of the marriage, any distribution agreements between the parties, sources of income, employability of the parties, etc. Most states allow the court to take into account nontanginble contributions to accumulating property, such as a spouse’s domestic support of the household.
“Community property” laws, on the other hand, see property as generally owned half-and-half by the husband and wife and seek to distribute the property by effectively cutting it down the middle.
Related: How to hold on to your property in a “community property” state
Photo credit: Images_of_Money