Property Division Flashcards
What is equitable distribution?
Most states follow equitable distribution to divide property upon divorce.
STEP ONE: Classify property as marital or separate.
STEP TWO: Value the property
STEP THREE: Divide the property
What constitutes marital property?
Property jointly owned and jointly acquired through the labor of the parties.
Property acquired during marriage is PRESUMED to be marital property.
What constitutes separate property?
Property owned before marriage, acquired after dissolution of marriage, excluded by premarital agreement, or acquired by gift or inheritance to one spouse.
Classification of increased value of separate property typically depends on the reason for the increase of the value.
If increase is due to PASSIVE appreciation – increase = separate property.
If increase is due to LABOR OF THE PARTIES – increase = marital property.
How do you characterize mixed character, commingled, or transmuted property?
If separate property can be traced to its source and its character is proved as either separate or marital, treat it as such.
How do you classify the marital residence?
If purchased prior to marriage but marital earnings were used to pay off mortgage and build equity in the house – can be both separate property and marital property, and reimburse marital estate for mortgage payments.
How do you classify pension/retirement accounts?
Whether accounts are vested or unvested they are subject to equitable distribution but not premarital contributions or post-separation increases.
How do you classify stock options?
Options granted to a spouse during marriage are marital property.
How do you classify debt?
Debts incurred DURING marriage = marital debts.
Debts incurred BEFORE or AFTER marriage = separate debt of the spouse who incurred the debt.
When is property valued in divorce proceedings?
Valuation is determined at the date the parties separate.
What are the factors used in equitable distribution?
Court determines what is an equitable distribution of all marital property based on factors including:
+ Length of marriage
+ Standard of living during marriage
+ Contributions (monetary and non-monetary) of each party during the marriage
+ Current financial circumstances of each party
