Property Division

Question 1

What are the three approaches to property division?

Answer 1

1. Community Property
2. Equitable Division of All Property
3. Equitable Division of Marital Property (majority of states follow this method).

Question 2

How do courts divide property under the “Community Property” method?

Answer 2

Under Community Property, the court divides all property owned equally. 50-50.

Question 3

How do courts divide property under the Equitable Division of Property?

Answer 3

Under the EDP method, Courts divide all property equitably. (not equally).

Question 4

How do courts divide property under the Equitable Division of Marital Property?

Answer 4

Two Steps:

1. Classify property as Separate or Marital Property, and
2. Equitably divide the marital property.

Question 5

What is considered Separate Property?

Answer 5

1. Property owned Prior to marriage
2. Property acquired by gift or inheritance
3. Property acquired in exchange for separate property,
4. Income and appreciation of separate property. (own a rental, and you rent it out while married, that income is separate property).
5. Pain and suffering awards and Personal damage awards
6. Property acquired after an order of legal separation that includes a final disposition of property.

Question 6

What is considered marital property?

Answer 6

Property that is

1. acquired during marriage
2. Employee earnings, such as salary,
3. Employee benefits, such as retirement accounts and stock options,
4. lost wages
5. reimbursement of medical bills incurred and paid with marital property, and
6. Recovery for damages to marital property.

Question 7

What is commingling?

Answer 7

When separate property becomes inextricably intertwined with marital property or with the separate property of the other spouse to the extent it can no longer be traced.

Question 8

What is transmutation?

Answer 8

When separate property is treated in a way that evidences an intention for it to become marital property.

Question 9

How are improvements to separate property divided?

Answer 9

If it is improved by marital funds or by the effort of the other spouse, the property generally remains separate property, but the spouse is entitled to a share or reimbursement for the value added to the separate property.

Question 10

How does a court classify property obtained prior to marriage, but paid for afterwards?

Answer 10

Courts are split: the majority view seems to apportion the property as separate and marital property proportionate to the contribution of separate and marital funds to purchase the property.

Question 11

What are the primary factors a court considers in equitable division?

Answer 11

1. Age, education, background, and capabilities of both parties
2. Duration of the marriage
3. Standard of living,
4. Present income,
5. Source of money used to purchase the property,
6. Fault.