It can be hard to think in terms of self-preservation when you're rushing down the aisle on your way to wedded bliss. But Divorce Source, a website dedicated to providing information to people in the process of divorce, recommends doing just that. A marriage is a business partnership. You're going to put money into it, your spouse is going to put money into it, and you're probably going to take on some debt. If the partnership ends, there are certain rules that can help you or hurt you, depending on whether you're prepared for them.
Definition
Only marital property can be distributed in a divorce. If you acquired it after you were married and before one of you filed for divorce, then in general it's marital property. Your home and automobiles are obvious assets to be split up, but don't forget timeshares, retirement funds, life insurance policies, jewelry, even the family pet if he's a purebred that came with a significant price tag. Debts attached to the assets are also subject to distribution.
Exceptions
Some assets are legally exempt from distribution even if they were acquired during the course of the marriage. These include inheritances, personal injury awards and workers compensation payments. Anything you owned before you got married is exempt, too, unless you invested money into it during the marriage to increase its value. Passive appreciation--such as what might result from inflation over the years--is generally not considered.
Types
All states distribute property in a divorce in one of two ways. Community property states scissor all marital assets and debts neatly down the middle. These include Alaska, California, Nevada, Arizona, Texas, New Mexico, Louisiana, Idaho, Wisconsin and Washington. All other states divide marital property according to equitable distribution laws. Property and debts are divided at the discretion of a judge based upon what he considers to be fair and equitable.
Considerations
Most states will not consider fault in a divorce when deciding what is fair, but some do. If, for instance, your infidelity caused the breakup of your marriage, it is within the realm of possibility that a judge in an equitable distribution state will balk at rewarding you for it by apportioning generous assets to you to the detriment of your spouse, who is considered the innocent party.
Advice
Divorce Source recommends prenuptial agreements, which insure that in the event of divorce, assets and debts will be allocated in a way you can live with, not by the ruling of a judge. Carol Lawson, a divorce attorney in Florida, notes that even if you didn't make a prenuptial agreement, you can still decide between yourselves how you're going to divide assets and debts when you divorce. You or your attorney can write up a matrimonial settlement agreement--also called a property settlement agreement in some states--detailing how you've agreed to distribute your property. Unless it is egregiously unfair to one spouse, a judge will incorporate it into your divorce judgment rather than make a ruling.
Warning
Family law judgments do not hold any significance with creditors. If your spouse is assigned to pay off a joint debt and he doesn't, the creditor can still come after you. Make sure he's obligated to refinance the debt or do whatever is necessary to take your name off it immediately. Even if it's in his sole name, if it was acquired while you were married, it's considered a joint liability unless he refinances.
