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Division of Assets
There are few, if any, aspects of divorce that are pleasant, however, the division of assets and property tends to be one of the more contentious issues for most couples.
Not only must you divide the “big” things acquired during your marriage (homes, vehicles, bank accounts, collections, businesses, etc.), but you must also split up the more mundane household items. If you and your spouse have been married for many years, splitting up assets and property becomes even more difficult because you have more assets.
Some couples end up using the division of assets and property as a contest to see who “wins,” or who gets more. In fact, in some instances, divorces have dragged on for years simply because neither side was willing to give up assets to the other. While you absolutely need an experienced Alabama division of assets attorney to ensure you are not shortchanged during asset and property division, sometimes it’s better to let the smaller things go and move on with your life.
While the perception exists that men are the ones who come out on the losing end during a divorce, the reality of this tends to be much different. According to an article in the Atlantic, women who worked before, during, or after their marriages see at least a 20 percent decline in income when their marriages end. Men, on the other hand, typically see their incomes rise more than 30 percent post-divorce. Obviously, every divorce is different, but to ensure the most equitable division of assets during an Alabama divorce, speak to a knowledgeable attorney from Hankey Law Firm.
How Does Division of Assets Work in a Divorce in Alabama?
The state of Alabama operates under the law of equitable distribution rather than community property laws. Only a handful of states still have community property laws in place, which require that all marital assets be split exactly down the middle, regardless of any extenuating circumstances. Equitable distribution laws allow for a fair distribution of assets which may or may not result in a 50/50 split. All marital property and debt will be divided in a way that is most equitable to both parties.
If one spouse worked the entire time while the other had a much lower-paying job or was a homemaker, the homemaking contributions will be taken into consideration, however, the higher earner is likely to be awarded a larger share of the assets. This assumes, of course, that there is no prenuptial or post-nuptial agreement in place that dictates how assets will be divided in the event of a divorce. If you and your spouse cannot determine how to split the marital assets, a judge will make those decisions, based on the following:
- The length of your marriage
- Whether both parties will be able to be self-supporting after the divorce
- The age and health of both spouses
- Whether either spouse contributed to the education or increased earning ability of the other
- What the overall standard of living was for the couple during their marriage
- Whether one spouse provided homemaker or parenting services in lieu of being a wage-earner
- The earnings of each spouse
- Whether there will be tax consequences to either party from the asset distribution
- What type of marital property the couple has, and what the value of the property and assets are
- Whether either spouse has alternate sources of income such as disability or retirement benefits
- What the custody and living situation will be for the children of the marriage
- Whether either party willfully dissipated marital assets
What Are the Most Common Types of Marital Assets and How Are They Divided During a Divorce?
- Marital Home—Division of the marital home will depend on several things, including whether the parent who has been awarded primary custody of the children needs to stay in the marital home to keep the children in their current schools, whether one spouse owned the house prior to the marriage, or whether one spouse contributed significantly more financially to the purchase and upkeep of the home.
- Vehicles—The division of vehicles will depend on whether there is debt owed on the vehicles, whether one spouse was the higher wage earner, and whether the parent with primary custody of the children has a particular need for one vehicle. As an example, even if one spouse was the higher wage earner, if the other has primary custody of five children, then the minivan would likely be awarded to that parent even if it is worth considerably more than the family’s other vehicle or vehicles.
- Furniture—Dividing up furniture will depend on whether the furniture needs to stay with the parent who has primary custody and was awarded the marital home, or, if there are no children, the higher wage earner could be entitled to the majority of the furniture. If some pieces of furniture were given to the couple by the family of one or the other, then that spouse might have a larger claim to the furniture.
- Bank Account—Bank accounts may be split by giving two-thirds of the money to the higher wage-earner, and one-third to the lower wage-earner or the spouse who was a homemaker during the marriage. This can certainly change, however, based on individual circumstances. For instance, if the couple enjoyed a fairly high standard of living during the marriage, and the spouse who was not a wage-earner is older, therefore, has less opportunity to secure education and training, then the bank account could be split 50/50.
- Investments—Investments are sometimes divided according to the two-thirds/one-third formula if one spouse was a much higher wage earner. In some cases, however, the investments made by one spouse with his or her wages could be divided with more being given to that spouse.
- Electronics—Since most households today have more than one television and more than one computer, it can be relatively simple to divide these items between spouses. If there is only one television set and one computer, a judge might decide the parent with primary custody of the children needs those items more, or when there are no children, the higher wage-earner could be awarded these items.
- Jewelry—If there is a huge disparity between the jewelry of each spouse, then the spouse with more high-worth jewelry might be required to sell the jewelry and split the profits between the two spouses.
- Income—When one spouse is a much higher wage-earner, then how his or her income is split will be determined by whether there are children of the marriage, the needs of those children, and whether the other spouse is young enough and healthy enough to gain the skills that would allow them to secure a good job.
- Retirement—Any money placed into a retirement fund prior to the marriage remains the property of the spouse who put the money into retirement. Funds deposited into a retirement account after the marriage may be split two-thirds/one-third if the spouse with the retirement fund is a higher wage-earner. If both parties have retirement accounts that are relatively similar, each spouse may be awarded their own retirement account. Dividing retirement accounts can be difficult, so it is essential that your Alabama division of assets lawyer have a solid understanding of how retirement funds are divided.
- Benefits—Perhaps one spouse receives a substantial bonus at the end of each year. The judge may determine that the expected bonus be split between the spouses, whether 50/50 or in another proportion. Some individuals that don’t want their spouse to have a portion of their bonus or other benefits may ask their employer to defer those benefits. It is important that you understand exactly what benefits your spouse receives so you will know what you are entitled to.
- Businesses—Businesses can be extremely complex to divide, particularly family businesses. Usually, the business must first be valued by a professional. If the business was owned prior to the marriage by one spouse, then only the value that accrued during the marriage is subject to division. The spouse that has the larger interest in the business or the spouse that ran the business, may choose to buy the other spouse’s interest in the business. As an alternative to a cash buyout, the other spouse may be given a larger share of other marital assets. The couple could decide to continue to jointly own the business after the divorce. This solution obviously will only work if the spouses still get along well and can work together. If the business is not a family business, it may be sold, with the proceeds of that sale distributed between the spouses in an equitable manner.
- Gifts—Most people assume any gift they were given during the marriage belongs to them, but this is not the case. Even if your spouse gifted you with a vacation home for your 50th birthday, this does not mean it’s “yours,” since it was bought with marital assets.
What is the Difference Between Separate Property and Marital Property?
Separate property is anything owned prior to the marriage, or inheritances either spouse received before or after the marriage. However, if the separate property has been commingled with marital property, it becomes marital property. As an example, if your father left you $50,000 before your marriage, but you add your spouse’s name to the bank account where you keep that money, it becomes marital property, subject to division. If you inherited a home or land, if you add your spouse’s name to the title, it becomes marital property. Even if you keep the home or land legally separate, any increase in value during the marriage or any improvements made with marital funds is subject to division.
How Can You Protect Your Assets During a Divorce?
The best way to protect your assets in the event of a divorce is to have a solid prenuptial or post-nuptial agreement that clearly spells out what assets are yours alone, therefore, not subject to division. If you want to ensure that inheritances or property you own prior to the marriage remains yours alone, you must take steps to protect those assets. You cannot commingle the assets with marital assets—even though you and your spouse know that $100,000 in your joint bank account was there before the marriage, if both names are on the bank account, the money will be divided.
How Can an Alabama Division of Assets Lawyer Help Ensure Fair Asset Distribution?
It’s important to know that deliberately hiding marital assets from your spouse during a divorce can get you in serious trouble—and your Alabama division of assets lawyer will certainly not help you hide assets. Your attorney will, however, have a clear understanding of what you are entitled to when the marital assets are being split. It is imperative that you have a strong attorney who will safeguard your rights and your future during an asset split, ensuring you receive what you are entitled to.
How Hankey Law Firm Can Help with Property Division in a Divorce
Choosing Hankey Law Firm and attorney Shelbie Hankey as your Alabama division of assets lawyer is an extremely important step to take once you’ve decided to divorce. Few people going through a divorce are familiar with the legal process and understand what they are legally entitled to receive during the division of assets. At Hankey Law Firm, we can help you make sense of your circumstances, taking away much of the worry and uncertainty you are feeling. Your case will be prepared in a comprehensive manner by professionals who never overlook deadlines or fail to communicate with clients.
Helping North Alabama families navigate the emotional and legal burdens of family law disputes.
