Financial Consequences of Divorce
In most marriages, couples combine their debts and their assets. One of the challenges in divorcing is determining the division of those debts and assets.
The longer a couple has been married, the more difficult the division of debts and assets becomes. Couples may choose to sell large items, such as their home, and split the proceeds. One partner may buy out the other’s interest in property or a business. Couples who choose to divorce and can do so amicably may decide to continue sharing ownership of certain things, like vacation homes. Other assets, such as retirement accounts, will also need to be equitably divided.
How to Split Assets
Generally, courts consider property as being separate or community. Anything owned before marriage is separate and belongs to its rightful owner. Something acquired during marriage is community property, even if the property was purchased using a single partner’s income.
Equitably does not mean a 50/50 split. Judges will take into account many factors, such as time spent out of the workforce, especially if one is supporting the other’s career, and children’s custody arrangements to fairly divide community property. Regardless of who earned them, retirement counts are typically split equally.
Divorcing spouses who own a business together can be in a particularly trying situation and might choose to sell the business, one partner buying out the other, or they may strive to continue their business partnership.
Debts incurred during marriage will also need to be separated. If one person acquired student loan or credit card debt during this time, both parties could be liable for it.
The assets and incomes that once supported one household will now need to support two. Take into account costs associated with property, such as taxes and maintenance and be sure these things can be afforded.
A spouse who has been fully supported by his or her partner will now need to live on less and may need to find work to make ends meet. A spouse who has been the breadwinner may now need to pay spousal or child support, so affording the same standard of living as experienced in married life may not be possible after divorce.
Stallings Family Law will help in detangling couple’s debts and assets in a fair manner so each person move on with their lives.