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Dividing Property in a Divorce

One of the largest sources of distress for couples going through a divorce is the process of dividing up the property. Determining who should get what can be a lengthy and frustrating ordeal, even with the assistance of experienced divorce lawyers. How exactly the property is divided is determined by two factors: whether or not the couple can agree on how to divide the property, and the divorce laws of the state in which the couple resides.

Couples that have an especially bitter relationship, and can’t come to an amicable decision on their own, will need to have the court decide for them. The court’s decision is based on the state’s divorce laws. Those laws fall under two primary categories: Community Property, and Equitable Distribution.

Community Property: This is applicable in Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin, and the territory of Puerto Rico. This policy identifies property that was owned by both spouses as community property, which is divided equally. All other personal property is considered separate property and remains in the possession of the spouse who originally owned it.

Equitable Distribution: This is applicable in all states that community property isn’t, and divides property between the spouses equitably, but not equally. In other words, one spouse may retain possession of more than half the total value of all the property. All assets accumulated by the spouses are divided based on what the judge deems to be fair. This means that the result of dividing the property in one divorce can be very different from the result of another.

When property is divided, each spouse is awarded a percentage of the total value. When trying to split valuable possessions or certain items that one spouse wants to retain solely, asset substitution can be employed. This allows one spouse to essentially buy out the other spouse by trading away other property.

The issue of which spouse retains ownership of the house is frequently the most contentious one. Assuming that the couple owns the marital home together, dividing the property can have many results. If there are children in the equation, then it is likely that in order to preserve the child’s lifestyle, the spouse who was most responsible for child-raising will retain ownership of the home.

Property and assets aren’t the only things that are divided between spouses in a divorce. Debt is also factored in. Typically debts can be traced to an individual, and that individual is responsible for the debt’s repayment. Typically, any debt accrued by a spouse prior to the marriage is the sole responsibility of that spouse. In instances where debt is shared however, an agreement on who is responsible for the debt must be made, otherwise the court will decide. When assigning debt, considering each spouse’s financial situation and ability to pay is important since it is possible for one spouse’s credit to be affected by the other’s late payments or lack of payments.

Avoiding financial disputes is obviously in the best interest of both spouses, but given the emotionally difficult nature of getting a divorce, it may not be possible for both parties to remain civil and cooperate. A separation agreement can be made with the assistance of a mediator, typically a divorce attorney, in an effort to minimize the time and cost of determining a divorce settlement. Hiring a lawyer may seem like an expensive, and maybe even unnecessary step in the divorce process, but given the complexities of property division alone, it is likely the most expedient and cost efficient way to get a divorce.

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The Basics of Prenuptial Agreements

A Prenuptial Agreement is a contract between two people that is entered into prior to being married. This legally binding contract can cover a variety of areas concerning assets and debt among the couple. There is a common misperception that prenuptial agreements, or prenups, are only for the very wealthy, but the truth is that they can be used by all individuals to protect each parties assets, and to clearly define each parties rights and responsibilites in the event of a divorce. It may seem pessimistic for a couple to be planning for divorce before they even get married, but for those who have gone through a divorce already, or know the pain of someone else who has, prenuptial agreements are a logical solution to prevent potential problems in the future.

It is still being estimated that roughly half of all marriages end in divorce, so some preparation for that possibility is a logical step. All prenuptial agreements are customized to meet the specific needs of the couple. This factor greatly increases the likelihood of both parties agreeing to it, which is, of course, necessary for it to be binding. Full and complete financial disclosure between the parties is also a mandatory requirement for all prenuptial agreements. There are numerous issues and areas that a prenuptial agreement can address, so it can be confusing to prepare and draft one, without the assistance of an experienced family lawyer.

Here is a list of some general areas that a prenuptial agreement could cover:

• The protection of separate property interests, including, business interests
The division of separate and marital property and assets (including marital residence)
• The responsibility and or division of premarital debts
• The distribution of property upon death
• Alimony obligations

There are other areas as well, including the financial obligations of each party during the marriage, and more specific guidelines regarding particular items of property. It is even possible to establish a clause within the contract that makes the prenuptial agreement time sensitive. In that case, the prenuptial agreement expires after a set number of years after the date of marriage. This is known as a sunset clause.

There are, however, a few key areas that cannot be covered by a prenuptial agreement. Any clause that is essentially illegal or clearly unfair will not be enforced by the Courts, and can not be made part of the contract. In addition, any provisions and agreements relating to child custody, visitation, and/or child support are always subject to be reviewed and modified by a Court. The benefits resulting from a well drafted prenuptial agreement, and specific details of each couples circumstances that can be addressed, make a prenuptial agreement a viable option for virtually every couple that is getting married.

After a couple does agree to a prenuptial agreement they should also periodically review it and make updates. This should also be done if a will or other estate contract has been modified or updated so that the two documents are not contradictory.

Broaching the subject of a prenuptial agreement can be difficult, but if the relationship is one that is open and honest, then a logical discussion can be had. This conversation shouldn’t be avoided. Contacting a law firm experienced in family and divorce law and establishing a prenuptial agreement is something that should occur well in advance of the marriage. After all, without a prenuptial agreement, it may be left entirely up to a divorce court to decide each and every issue regarding each persons property rights and financial obligations.

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