According to the American Psychological Association, approximately 40% to 50% of all marriages end in divorce. When a married couple divorces, they might face some challenges, including determining how to divide their assets.
As you’re preparing to initiate a divorce, you might wonder who gets the house. You might also want to know about other assets you jointly own. You’ll probably have many other questions about how couples divide assets in a divorce.
Here is a guide to help you know how to divide assets in a divorce, including your home, rental property, and other assets.
Your State’s Laws Matter
The first thing to understand is that all states have divorce rules. These rules dictate what you need to prove for a divorce and the waiting period rules. They also control how to divide property in a divorce, including rental property.
Therefore, the first thing you should consider doing is visiting a divorce law firm. Speaking with an attorney before filing the divorce documents can help you learn what to expect from your case.
Your attorney can also help you determine what laws your state has relating to the division of assets. Learning as much as you can about your state’s laws can help you get started with the process.
You Can Start by Separating the Assets
Most states allow couples to separate their assets into two categories. The first category is for separate assets, which are the things each spouse owned before they got married.
Separate assets can also include inheritances each spouse received during the marriage. States might also allow you to include other assets in this category.
When you have separate assets, it means that you do not have to divide them in your divorce. You can keep the assets that are yours, and your spouse can keep theirs.
The other category of assets is community assets. Community assets are the things you purchased together during the marriage. These are the things that you both own and have equal rights to when you divorce.
So, if you’re wondering how to divide assets in a divorce, you’ll need to begin by separating your assets into these categories. Once you do this, you’ll know which ones you must divide.
Determine Who Wants the Assets
The next thing to consider is which spouse wants the assets. For example, if you own a house together, who wants it? Do you want to keep it, or does your spouse want it?
If just one spouse wants it, you’ll have an easier time dividing it. If you both want it, you might encounter a major fight over it.
You can work your way through each asset that you must divide to determine who wants it. In a perfect case, each spouse would want equally valued assets. If you can reach an agreement like this, you can avoid challenges.
Most situations are not that simple, though. You might want assets that total $200,000 in value, while your spouse might want assets totaling $100,000. It wouldn’t be fair to divide them this way, though.
You’ll have to divide them in a way that each spouse receives approximately the same value. Achieving this is not that simple.
Consider Who Can Afford Them
Another thing to consider is who can afford the assets. Suppose you own a house that you want to keep. Could you afford the payments? Are you able to get a loan in your name?
If you can’t afford the house, you probably shouldn’t fight to keep it. The same is true for dividing rental property. If you have no experience managing rental property and couldn’t afford the payments, you probably shouldn’t fight to keep it.
When you own assets that don’t have loans, it’s a little easier dividing them. When you own assets, you won’t have to worry about affording the payments, as there wouldn’t be any.
Find Ways to Divide Assets in a Divorce Equally
One of the primary goals of dividing assets in a divorce is finding a way to divide them equally. To do this, you’ll need to make a list of each asset with its value. Next, you’ll want to write down which spouse wants the item.
When you add these up, you should have similar amounts. If one spouse is getting more than the other, that spouse will have to pay the difference to the other spouse.
For example, suppose your spouse wants $100,000 of assets, and you want $60,000. Because your spouse is getting $40,000 more than you, he or she should pay you $20,000 in cash.
If you work it out this way, you’ll each have around $80,000 in assets. Your divorce attorney will assist you in dividing your assets fairly and evenly.
Aim to Get the Debts in Each Spouse’s Individual Name
One of the other goals you should aim for is getting the debts in the appropriate spouse’s name. As you divide assets, you might also be dividing debts.
For example, if you own the house jointly, the loan will be in both names. If your spouse gets the house in the divorce, they should get a loan in their name alone. By doing this, you will no longer be responsible for making the payments on the house.
If you have other assets with loans, you’ll need to do the same thing. If you have debts in both names that you must divide, you’ll also want to make sure you separate them by each spouse’s name.
Handling all of these steps during your divorce can help you prevent and alleviate potential problems down the road. Your attorney can help you find the best ways to divide assets and debts as you work through your divorce case.
Learn More About Dividing Your Assets in a Divorce
Finding the best way to divide assets in a divorce can be challenging in some cases. As a result, you’ll need an experienced divorce attorney assisting you with your case.
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