Assets and Debts in Divorce
Assets and debts are initially divided into two categories: marital and nonmarital. The general rule is that all assets and debts are marital unless one spouse can prove that an asset or debt is nonmarital. Assets and debts are nonmarital if they were owned prior to the marriage, or if a current asset or debt can be traced back to an asset or debt that was owned prior to the marriage.
For example, if a wife owned a car outright, without any loans on it, when she got married and then, during the marriage, sold that car and used the sale proceeds to buy another car, then the second car is likely a nonmarital asset even though it was purchased during the marriage. Inheritances and gifts may also cause an asset to be nonmarital.
Assets and debts that are nonmarital are typically awarded to whoever owns it.
Marital assets and debts are obtained or incurred during the marriage. The general rule is that the courts will fairly divide the marital assets and debts. Courts usually decide that an equal split is fair, unless one of the parties can make a strong case that an unequal division of the marital assets and debts is fair.
Dividing assets and debts in a divorce can range from very simple to extremely complex. Cases that involve tracing nonmarital claims or the division of assets that include retirement accounts, investment assets, or the valuation and division of a business can be very complicated and require significant due diligence and expertise.
Johnson/Turner has developed proprietary processes and systems that allow us to efficiently work through all of these issues, and we discuss them very early with clients—so early, in fact, that we discuss it even before we are hired. After we gain a thorough understanding of your case, we can give you a good sense of what to expect.