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DIY Divorce Guide

Divorce and Property | Division of Assets in Divorce

Complete divorce guide with state requirements and laws.
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Many people contemplating pro se divorce actions ask if self-representation can be used to end a marriage where property is a major consideration. The answer is yes.

3StepDivorceTM works when spouses who agree to an uncontested divorce, even when they have considerable assets and liabilities. And 3StepDivorceTM is easy, fast and affordable, because the spouses do the work at their own speed. The goal is to prepare the proper paperwork that reflects a property and/or debt distribution that you and your spouse agree to. With good communication and amicable negotiation this is often achievable.

Division of property is one of the greatest challenges of a divorce, mainly because couples generally do not keep records of who owned what before and during the marriage. Assets and liabilities become commingled. When couples want to file pro se, they normally divide the marital estate, which includes all assets and liabilities to how each party agrees.

In a divorce the law says a great deal about the division of property, particularly when the spouses cannot agree. Pro se filing couples make many of these decisions regarding the division of the property together. The couple has more decision-making authority than if the case goes to trial, and this allows the couple to come together in a more friendly way. By developing their own agreements, divorcing couples are more likely to follow through on those decisions. The process then reduces the cost and time couples invest in litigated divorces. This is, of course, one of the main reasons people file pro se and why 3StepDivorceTM is a great alternative for couples who wish to file for their own divorce.

What is important to one spouse may not be important to the other, or visa versa. It is important to remember that with all property sentimental value may not be the best influencer when it comes to division. Couples negotiate in different ways: some often focus more on their relationships with others and this will influence how they will negotiate for items of the marriage. While others focus less on the relationship and more on task-specific goals.

Couples dividing property pro se need to be mindful of valuation fluidity because psychological factors may lead to certain items being valued either more or less than other items. Perceived ownership, which can come from touching an object or imagining owning it, may increase the value of that object. In other words, people may feel a sense of ownership of an item even if they do not legally own it, which may place a higher value on the item thus overvaluing an item due to sentimental reasons.

Some items might actually feel less of a loss than others. For example, people may feel less loss when they give up stocks or retirement accounts than they would if they had turn over cars or household goods because cars and goods are concrete and have high legal and perceived ownership. Stocks and retirement accounts are pieces of paper and may not have a perceived ownership lowering its perceived value. It is important to make sure that valuation fluidity does not become a detriment to the party giving up property in a divorce settlement.

Debt Division

In dividing debt in a pro se action, spouses must remember that credit card companies are not obligated by a divorcing couple’s property agreement. In all jurisdictions, joint credit card debt is jointly owned because each spouse has joint and several liability for the obligation. Even when one spouse agrees to take on a debt, if it has the other spouse’s name on it, or in some cases, if it does not, the creditor has the right to come after both spouses for payment. 

Divorcing couples often deal with debt in one of three ways. First, the couple will pay off all the debt; second, they pay the debt jointly; and third, the couple will divide the debt and each pay his or her agreed to share of the debt. While the first option may be difficult, it appeals to many pro se filers because it makes for a clean break and fresh start without conflict between former spouses. The second and third options not only make for continued contact, but also put one spouse’s credit at risk.

Debt division depends upon whether the divorcing couple lives in a community property or equitable division jurisdiction. In a community property state, a spouse is responsible for debts incurred during the marriage and it does not matter whose name is on them; in an equitable distribution state, debts in one spouse’s name are his or hers alone, but a spouse is responsible for debts taken in his or her name, even those without his or her consent. Using the 3StepDivorceTM system, spouses are free to work out their own debt division.

Marital versus Separate Property

Many divorcing couples decide about dividing their property and debts themselves with or without the help of a neutral third party, rather than leaving it to the judge. Courts will generally approve any property division agreement the spouses devise so long as it is fair.

If a couple cannot agree on division, they can submit their property dispute to the court, which will use state law rules to divide the property. Under this situation, the divorce is no longer uncontested and the representation of a lawyer would be the best option.

Pro se filers must distinguish between marital and separate property, which can be confusing and challenging, especially when a couple has been married a long time and accumulated a large estate. When the couple cannot or will not do this, courts divide property and debts under one of two basic rules: it is either divided under community property or equitable distribution depending on the state laws.

Community property, also considered marital, includes all income during the marriage as well as things that were acquired with the earnings. All debts incurred during marriage, unless the creditor is specifically looking to the separate property of one spouse, are considered community property debts.

Separate property of one spouse includes gifts and inheritances given just to that spouse, personal injury awards received by that spouse, and the proceeds of a pension that vested, which means, the pensioner became legally entitled to receive them before marriage. Property purchased with the separate funds of a spouse remains that spouse's separate property.

Dividing a business can become particularly difficult. A business owned by one spouse before the marriage remains his or her separate property during the marriage. A portion of it may be community property if the business appreciated during the marriage or both spouses worked at it. If separate property is commingled with community property during the marriage, it becomes community property, either in part or entirely, depending on the circumstances. Property purchased with a combination of separate and community funds is part community and part separate property when a spouse demonstrates that some separate funds were used. Separate property mixed together with community property generally becomes community property.

What sometimes makes property division confusing is that division of property does not necessarily mean a physical division. The court may award each spouse a percentage of the total value of the property. In that event, each spouse receives personal property, assets, and debts with a worth equal to his or her percentage.

Also, it is illegal for either spouse to hide assets in order to shield them from property division.

Eleven states -- Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin, and Puerto Rico, classify all property of a married person as either community property, which means owned equally by both spouses, or the separate property of one spouse.

In the other 39 jurisdictions assets and earnings accumulated during marriage are divided equitably but not necessarily equally. In some of those states, the judge may order one party to use separate property to make the settlement fair to both spouses.

House and Home

Divorcing couples can become very possessive about a house, particularly when they are trying to divide the marital estate themselves and have minor children. In the end, couples normally make one of three choices. They can 1) sell the house and split the proceeds; 2) one spouse buys the other’s interest as part of settlement; or 3) continue to own the house jointly. Each of these approaches has advantages and disadvantages, depending upon the situation of the divorcing couple.

If children are involved, the parent who spends the most time with the kids and provides their primary care usually remains in the marital home with them. For this reason, the court often awards the house to the custodial parent. If the couple is childless and the house is the separate property the house may be the separate property of the spouse the home is titled. Childless couples that own a house jointly face a knottier question because neither spouse has a legal right to the property solely.

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