Property Division & Maintenance

Question 1

What are the issues affecting distribution of property?

Answer 1

(1) What are the property and debts are of the marital estate that are subject to division?
(2) What is the value of the property?
(3) Which property is joint and which is separate?
(4) What is a just and equitable division?

Question 2

What property is subject to division in most states?

Answer 2

In most state, all property, both jointly and separately owned, may be subject to a just and equitable division division.

Question 3

What is the doctrine of community property?

Answer 3

A minority of states follow the community property rule. In a community property state, all assets acquired during the marriage are considered “community property” owned by both spouses equally.

Question 4

In a state that recognized the doctrine of community property, when does accrual of community property begin and end?

Answer 4

• Accrual begins when the couple marries.

- Accrual ends when the couple physically separates with the intention of not continuing the marriage.

Question 5

In a state that recognizes the doctrine of community property, what does the marital property include?

Answer 5

Community/marital property includes:

• earnings during the marriage
• property bought with those earnings
• debts accrued during the marriage
• separate property that has become so mixed with community property that it cannot be identified

Question 6

In a state that recognizes the doctrine of community property, what property remains separate property owned by one spouse only?

Answer 6

• Property owned by one spouse before the marriage
• Property given to one spouse during the marriage
• Property inherited by one spouse

Question 7

In a community property state, how are assets divided?

Answer 7

In a community property state, only community property is subject to division and will be divided equally (50/50) between the spouses. Separate property will not be subject to division and will be retained by the spouse who owns it.

Question 8

In a community property state, what happens when one spouse dies?

Answer 8

Each spouse has a right of survivorship in the other spouse’s one half interest in the community property. Upon the death of one spouse all community property will automatically be owned by the surviving spouse.

Question 9

What is the majority rule for identifying marital property?

Answer 9

The majority of state follow the common law system of determining ownership of marital property.

Question 10

What is the common law rule for determining ownership of marital property?

Answer 10

• Under the common law, property acquired by one spouse during the marriage is owned completely and solely by that spouse.
• Property held in both spouse’s names is owned by spouse spouses in equal shares.
• Both separately and jointly held property may be subject to equitable division.

Question 11

Under the common law, what happens to property when one spouse dies?

Answer 11

The decedent spouse’s property will be distributed according to his will or intestate succession, unless a joint tenancy or tenancy by the entirety.

Question 12

If there is not deed or title document for a n item of property acquired during the marriage, what will determine ownership under the common law?

Answer 12

Whoever paid for the property or received it as a gift owns it.

Question 13

How are increases in value of separate property treated under the common law?

Answer 13

• If due to market appreciation, then the appreciation belongs solely to the owner spouse.
• If due to significant improvements by the non-owner spouse, then the character of the property may have changed to shared property or the contributing spouse may be entitled to reimbursement.

Question 14

What can change the character of property as separate vs joint?

Answer 14

• long-term commingling
• separate use of marital property
• significant improvements by a spouse

Question 15

What is a prenuptial agreement?

Answer 15

A written agreement signed prior to a marriage to designate property as either joint or separate upon divorce or death.

Question 16

What are the three main requirements for a prenuptial agreement to be enforced?

Answer 16

(1) full disclosure of assets and liabilities
(2) reasonable opportunity to for both parties to seek independent counsel
(3) the parties must be acting in good faith without fraud or coercion

Question 17

What is an additional requirement in some states for a prenuptial agreement to be enforced?

Answer 17

In addition to the the main elements (full disclosure, opportunity to seek representation, and good faith), some states also require a prenuptial agreements to be signed well in advance of a wedding so there is no last minute duress.

Question 18

What provisions in a prenuptial agreement will be set aside?

Answer 18

Custody or child support determinations that subsequently prove to be unfair will be set aside.

Question 19

What factors are used to determine a “just and equitable” division of property?

Answer 19

(1) Duration of the marriage
(2) Economic circumstances of each spouse
(3) The value of each spouse’s separate property
(4) Contributions of each spouse

Question 20

How does the duration of the marriage factor into equitable distribution of property?

Answer 20

5 years or less = short-term; court will try to return the parties to their positions upon entering the marriage

30 or more years = long-term; court will try to equalize assets and income

Between 5 and 30 years - court has discretion

Question 21

How do economic circumstances of each spouse factor into equitable distribution of property?

Answer 21

• Earning capacity, living expenses, and all resources available to each spouse are considered.
• Health and age are relevant.

Question 22

How does the value of each spouse’s separate property factor into the equitable distribution of property?

Answer 22

The court will consider the value of all property available to each spouse including business, business interests, retirement plans, 401(k) plans, stocks, bonds, etc.

The liquidity of the assets is also relevant.

Question 23

How do contributions of each spouse factor into the equitable distribution of property?

Answer 23

The court considers:

• the degree to which each spouse contributed to the acquisition of marital property
• the degree to which each spouse contributed to the education and earning power of the other spouse
• services rendered in the home by one spouse

Question 24

What must a court do about joint and separate property in an equitable distribution (i.e., common law) state?

Answer 24

The court must make a determination as to whether each asset is joint or separate property even though the determination will not control the distribution.

Question 25

Are income and employment benefits subject to equitable distribution?

Answer 25

Yes

Question 26

Is the goodwill or reputation of spouse’s business subject to equitable distribution?

Answer 26

Yes if it can be valued. Expert testimony will be required.

• Look for a lawyer, doctor, CPA with a well established practice.

Question 27

If a spouse has a right of reimbursement for improvements to the other spouse’s separate property, how is the amount calculated?

Answer 27

The value of service or contribution minus the value of benefits received from the use.

Question 28

Unless otherwise provided in the decree, what happens when it is discovered that one spouse hid an asset from the court during property division?

Answer 28

The asset will be held in common by both parties, and both will be entitled to 50% of the value.

Question 29

What is the modern term used instead of the word “alimony”?

Answer 29

Spousal maintenance

Question 30

What is the purpose of spousal maintenance?

Answer 30

• To provide a continuing income to a non-wage-earning or lower-wage-earning spouse
• To allow time to develop job skills to support his or herself
• To help a spouse continue the standard of living they had during marriage

Question 31

How does the court make determinations of spousal maintenance?

Answer 31

The court has discretion to make spousal support determinations on a case by case basis. The court will consider:

(1) Financial need for support
(2) Ability to pay support
(3) Education/skills of support seeker
(4) Standard of living of support seeker
(5) Age, physical, & emotional condition of support seeker

Question 32

What is rehabilitative maintenance?

Answer 32

Some states allow temporary spousal maintenance when one spouse has achieved a high degree of education and the other has not.

Question 33

When may a court modify spousal maintenance, child support, custody, or visitation rights?

Answer 33

When there has been (1) a significant change of circumstances that was (2) unforeseeable at the time of the original order.

Question 34

What are examples of an unforeseeable and significant changes of circumstances that might warrant modification of maintenance, child support, custody, or visitation?

Answer 34

• change in job or parental income
• change in a child’s emotional, physical, or financial needs
• modification will NOT be available to a spouse who caused the change in circumstances