How to Divide Property in a Divorce

When it comes to divorce process, the most difficult part faced by any couple is the settlement related to property and other important assets. Most often, couples in the US prefer to settle issues related to property with or without the help of a neutral third party like a mediator. Very few couples leave it to the judge but such situation only arises when a couple cannot agree with each other regarding the settlement.

A court looks after the issues related to property distribution according to the state laws. Since state laws vary, it’s vital to understand your state’s exact laws on division of assets in a divorce. Basically, in most of the US states, the property is divided under one of the two basic schemes: community property or equitable distribution.

What is Community Property?

Community property includes all earnings during marriage. At the time of divorce, community property is divided equally between the husband and wife. In the US, there are nine states where the concept of community property exists. They include: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.

To understand community property it is essential to mention about separate property. Just as the name suggests, Separate Property are those owned individually. For instance, property or businesses owned prior to marriage, gifts and inheritances from family can be termed as separate property. During the legal process, each spouse can keep his or her separate property and one cannot demand for a share in the separate property of the other.

What do you mean by equitable distribution?

In most of the US states, assets and earnings accumulated during marriage are divided equitably (fairly). Here everything acquired during a marriage in either spouse’s name or both spouse’s names is considered a marital asset subject to division in a property settlement agreement. ‘Equitable’ doesn’t necessarily mean ‘equal’, but what’s fair to both spouses. For equitable distribution, courts take into account the length of your marriage, the work history and job prospects of each, the physical and mental health of each, the expenses of children (if any), and the source of particular assets, and then proceed to make a divorce settlement that offer a fair division of property.

Determine Your Property Value:

When you decide to file a petition for divorce, you must prepare a net worth statement (assets minus debts) because your attorney will request a complete accounting of your separate and joint property. Important thing to note here is that it is illegal for either spouse to hide assets in order to shield them from property division.

Who gets the house?

The marital residence is an important part of the assets in a divorce and also one of the most difficult issues to resolve. There is one factor that helps in deciding who gets the house to stay after the legal process. It is the child custody. It means whoever gets the child custody usually become the owner of the house. But as far as court order is concerned it is not a guarantee that the home will go to the spouse who gets child custody.


If you don’t have children and the house is the separate property of just one spouse, that spouse has the legal right to ask the other to leave. However, in situation where couples own the house together and they even don’t have any child, then it becomes difficult for the court to make a decision. Both of you have the legal right to stay at the house and there are no obligations too. If the couple can come to a conclusion, then it is good otherwise the court can always make the final decision during the divorce hearing.

When it comes to who will be keeping the house, it is important to consider carefully whether any of you can afford to keep the family home following divorce, especially if it took two paychecks to qualify for the mortgage. If neither of you can afford the house on a single salary, it is a good option to sell the house and divide the proceeds (if any) after all mortgages are paid.

Best Option:

When it comes to division of property during divorce, the best way is to do it yourself with the consent of your spouse. More than a million divorces occur in the United States every year – about 50 percent of first marriages and 60 percent of second marriages. In nine out of 10 cases, couples settle the division of property themselves outside of court.

In most of the US states, if you and your spouse can agree on the division of property, whether it follows your state’s guidelines or not, the court will approve your divorce settlement agreement.

If you and your spouse are going to try to divide your property on your own, first make a list of all of the items that you own jointly. Once the list is ready you need to make an estimation of the market value of the property. Here you can take the help of some professionals too. Now it is time to decide who gets what. Issues that remain unresolved will be decided either by mediation or by the court. Once you and your spouse make the decision, it is the task of your attorneys to draft a divorce settlement agreement that will include the various agreements and disagreements too. This document should specifically detail who gets what property. Before submitting the document in the court it is important to review the document to make certain it is in order. Once it’s signed and become a permanent part of the final decree, it will be very difficult for you to change anything.

Final Steps:

As soon the settlement gets approved by the court, you need to complete the paper works for the transfer of property and other assets. There will be many papers where you will need the signature of your ex-husband or ex-wife. As soon as all the legal formalities are done, it is time to handle the emotionally trauma and move on after divorce.  

To conclude, the key to amicable division of assets lies in the cooperation and willingness to be fair amongst the couple. Also there should be actual disclosure of property and the estimated value of the property must be fair enough.

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