Property Division

Question 1

How is property distributed upon divorce?

Answer 1

Most states follow an equitable distribution scheme to divide spousal property upon divorce

Question 2

What is divisible marital property?

Answer 2

Property that is jointly owned and jointly acquired through the labor of the parties.

Question 3

What is presumption regarding the nature of property that is acquired during the marriage?

Answer 3

Property acquired during the marriage is presumed to be community/marital property

Question 4

What is separate property?

Answer 4

Separate property is owned by the person who holds title and includes property owned before marriage acquired after the dissolution of the marriage or acquired by gift or inheritance to one spouse during the marriage

Question 5

Is separate property divisible upon divorce?

Answer 5

No.

Question 6

When is the increase in value of separate property considered separate property?

Answer 6

If the increase in value of separate property is due to passive appreciation then the increase is considered to be separate property.

Question 7

When is the increase in value of separate property considered marital propety?

Answer 7

If the increase in value of separate property is due to active labor during the marriage then the increase is considered to be marital property

Question 8

How is mixed character, commingled or transmuted property characterized?

Answer 8

If separate component of property can be traced: property will be considered part separate, part marital property.

If tracing is not possible: separate property can transform into martial property

Question 9

How is a marital residence characterized in terms of its nature as marital or separate property?

Answer 9

If the marital residence is purchased prior to marriage but marital earnings were used to pay off the mortgage and build equity in the house, the home can be both separate property and marital property

Question 10

If a marital home is purchased prior to marriage but marital earnings are used to pay off a mortgage and build equity, must the martial estate be reimbursed for mortgage payments?

Answer 10

Yes.

Question 11

How are pension and retirement accounts characterized as separate or marital property?

Answer 11

Whether accounts are vested or unvested, they are both subject to equitable distribution, except for premarital contributions or post-separation increases

Question 12

How are stock options granted to a spouse during marriage treated for purposes of property distribution?

Answer 12

Options granted to a spouse during marriage, whether vested or non-vested and whether or not their value is ascertainable are presumed to be marital property

Question 13

How are stock options earned as employment compensation treated for purposes of property distribution?

Answer 13

If stock options are earned as employment compensation, their status as martial or non-marital property depends on when they were acquired and whether the work for which the options are compensation was performed during the marriage

Question 14

What factors influence whether stock options earned as employment compensation are treated as marital or separate property?

Answer 14

1. when the options were acquired?
2. whether the work for which the options are compensation was performed during the marriage

Question 15

How are professional degrees and licenses treated for purposes of property distribution?

Answer 15

Most states have held that professional degrees or licenses are not property interests subject to equitable distribution

Question 16

How do courts approach personal injury claims in terms of their character as separate or marital property?

Answer 16

Courts typically apply the replacement theory/analytic approach based on whether the claims represent lost wages vs. future wages or expenses
1. to the extent that damages replace lost wages that would have been earned during the marriage or medical expenses that were incurred during the marriage, those damages are marital property
2. to the extent that the damages replace future wages or future medical expenses, those damages are the separate property of the injured spouse

Question 17

How are lottery winnings characterized in terms of their nature as separate or marital property?

Answer 17

Lottery winnings won during the marriage are marital property.

Question 18

How are debts characterized in terms of marital or separate property?

Answer 18

Generally, debts incurred during marriage are marital debts, while those incurred before or after the marriage are separate debts of the spouse who incurred them.

Question 19

When is property valued for the purposes of asset distribution?

Answer 19

Property valuation is determined at the date the parties separate

Question 20

How is property divided at divorce?

Answer 20

Division is based on what is fair under the circumstances.

Question 21

Is property divided 50-50 upon divorce?

Answer 21

No

Question 22

What factors are used to establish what division of property would be equitable?

Answer 22

Factors that may generally be considered in determining what division would be equitable include:
1. financial status of need of the parties
2. contribution