When a couple decides to divorce, their property and their debts must be divided. Generally, they are divided equally between both spouses.
There are two types of property that must be considered for division. Community property is any asset or debt that was acquired during the marriage. It does not matter which spouse bought the property or which spouse’s name is on the title. Property must be divided equally, except in some circumstances where the property is exempt.
This property may include real estate, cars, bank accounts, retirement accounts or other assets. Equal division does not necessarily mean that the property is divided in half, however. The court generally considers the length of the marriage and the financial needs of each spouse in determining property division.
Also, if the spouses can agree in advance about how to divide the property, the court may take that into consideration.
Separate property is property or debts acquired before marriage and is not subject to division. This may include gifts or inheritance received during the marriage but given to one spouse only.
Debts must also be divided equally in the divorce. This can include credit card debt, car loans and the mortgage. Even though a court may order one spouse to pay a debt, some creditors may still hold both spouses responsible for the debt.
The spouses may decide to pay off any joint debts before the divorce to ensure that neither spouse is solely responsible for the debt.
Asset and debt division can be complicated, but it is important that it is completed correctly.