Asset division is one of the most difficult parts of divorce for many couples, especially those without children.
Understanding how assets can be divided in a divorce can help relieve any tensions that may exist about the process.
Defining community properties
The Business Professor delves into separate versus community properties. These are the two main categories that almost all assets will fall into during divorce: community and separate.
Community properties include assets that will get divided, while separate properties include assets that a person can typically keep to himself or herself without sharing with their spouse.
Community properties often involve anything that both members of the marriage purchased together, things purchased with a jointly owned bank account, and anything signed in the names of both parties.
Defining separate properties
Separate properties often include anything that a person owned before the marriage, gifts given directly to them, and inheritance they may have received.
Please note, however, that some separate assets may become community assets depending on how the person stores and treats them. For example, a person cannot claim a house because they spent their inheritance money on it, as this house likely has both of the couple’s names on it, and their spouse may have contributed to the purchase.
These are guidelines, but the reality may actually have more complexities than a couple initially anticipates. This is why it is important to go through every asset with financial representation before discussing the division of said assets. After all, asset division looks different for every couple.