Property

Question 1

Appraisal

Answer 1

Procedure for determining the fair market value of an asset when it is to be sold or divided as part of the divorce process.

Question 2

Career Asset

Answer 2

Assets tied to one’s career (e.g., health insurance, stock options, retirement plans, etc.)

Question 3

Community Property

Answer 3

In community property states, any property not deemed “separate” (i.e., owned before the marriage or obtained by gift or inheritance) is “community”
property and will likely be subject to a 50/50 division.

Question 4

Equitable

Answer 4

Means fair; does not necessarily mean equal.

Question 5

Equitable Division of Property

Answer 5

Method of dividing property based on a number of considerations (such as length of marriage, differences in age, wealth, earning potential, and health of
partners involved) to achieve an equitable and fair distribution—not necessarily an equal one.

Question 6

Goodwill

Answer 6

The value of a business beyond its sales revenue, inventory, and other tangible assets: including prestige, name recognition, and customer loyalty.

Question 7

Joint Property

Answer 7

Property held in the name of more than one person.

Question 8

Lis Pendens

Answer 8

A piece of property cannot be transferred during a pending lawsuit that may change the disposition of it once a notice has been led in the public record.

Question 9

Marital Property

Answer 9

Accumulated income and property acquired by the spouses during the marriage subject to equitable division by the court. States will vary on their precise
definition of what is to be included in marital property, sometimes excepting property acquired by gift or inheritance.

Question 10

Property Settlement Note

Answer 10

A note from the payor to the payee for an agreed-upon length of time with a reasonable interest rate. Can be collateralized.

Question 11

Recapture

Answer 11

Deductions taken in a previous year’s income.

Question 12

Section 1041

Answer 12

This section of the IRS Code states that any transfer of property between spouses during marriage (or former spouses if it is incident to divorce) is tax-free. No
gain or loss is recognized and for income tax purposes, the transferee’s basis and holding period in the property is the adjusted basis and holding period of the transferor. An assignment of an annuity contract is non-taxable for both the transferor spouse and the transferee spouse under this section.

Question 13

Separate Property

Answer 13

Generally considered any property owned before marriage (earned or acquired by gift or inheritance), acquired during the marriage by one partner using only that partner’s separate property, or earned after a formalized agreement. This denition will vary from state to state.

Question 14

Tax Reform Act of 1984

Answer 14

Tax Reform Act of 1984 (TRA) added Code Sec. 1041, which allows marital property to be transferred back and forth between spouses without creating any tax
on the transfer. The income tax basis of each asset is the basis of the asset in the hands of the transferor. TRA simplified the definition of spousal support, and it
prevents property settlements from being disguised as spousal support.