Separating Your Assets and Debts During a Complex Divorce
When you are getting a divorce and you have a significant number of assets, dividing your property is complex. In the state of Arkansas, the property is divided equitably. Unlike community property states, where assets are split right down the middle, equitable property division aims to divide property in a way that is fair to both parties, which may or may not be a straight 50/50 division.
Marital Property Vs. Separate Property
When dividing property in a divorce, property falls into one of two categories: marital property or separate property. Marital property consists of assets that were gained during the course of the marriage such as bank accounts, contributions to IRAs, houses, and cars. Separate property is property that was brought to the marriage by either party, and never shared during the course of the marriage. For example, if you had a significant IRA prior to getting married, only the money that was added to your IRA during the course of your marriage is subject to division.
If One Party Gets an Inheritance
If you receive an inheritance while you are married, this does not automatically become marital property. If get an inheritance and you keep the money in a separate bank account, the inheritance is yours to keep. If instead you got an inheritance and you put it into a joint bank account, the money you put into the joint bank account will be considered marital property. If you only put a portion of your inheritance into a joint bank account and you kept the rest separate, only the money that was placed in the joint bank account will be considered marital property.
Contributions to the Marriage Aren’t All Financial
When considering how each person contributed to the marriage, both monetary and non-monetary contributions are considered. While one party may have been the one to work outside the home and earn an income, the other party may have spent their days taking care of children. Both contributed to the marriage, and a stay at home mom is considered a valuable contributor to the marriage. If you were a homemaker, you still have the right to any financial assets the two of you acquired, even if you didn’t directly pay for the assets.
There are a number of factors considered when dividing up property in a divorce. The earning capacity of both parties is considered when dividing up property, and the current salary of both parties is looked over carefully. All marital property will be divided as fairly as possible, giving both partners in the marriage equal footing at the time of their divorce.
When There is Marital Debt to Consider
If there is a significant amount of debt, that is divided up the same way assets are. While you may not be responsible for half of the debt if you make less money than your former spouse, the debt will be divided up fairly and both parties will be expected to pay their share of the marital debt. When it’s impossible to figure out who is going to be responsible for which debt, it’s time to work with a qualified attorney to talk about your divorce agreement.
As you go through your divorce, it’s important to know what your rights are. When you have many assets to divide, or you have a large amount of debt to pay back, you need to know what is fair for you to accept in a divorce agreement. While your priority right now may be to get your divorce over quickly, the agreement you sign now will affect the rest of your life. Fill out our contact form or call (501) 329-8723 to learn more.