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Understanding Property Division following Divorce

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Marital property is considered property that is acquired during the marriage. It doesn’t legally matter who actually owns the property at the time of the marriage or how the marital property is actually titled. Many states vary in their divorce laws when it comes to equitable property and community property so you may want to consult with an experienced divorce attorney.


Family property is actually quite difficult to try and divide especially when it comes to assets such as rental property, houses, pension plans, retirement, restricted stocks, stock options, closely-held businesses, deferred compensation, licenses and professional practices. It becomes a challenge when it comes to dividing these types of assets, even in the most flexible situations. If you divorce gets argumentative, this is when everything becomes very complex.


Current dollar values shouldn’t really matter when it comes to dividing the marital assets. You and your retained counsel should understand which assets can be short-term and which can be long-term. An asset should be understood financially as well when it comes to cost basis, its liquidity, and any tax implications that may be associated with its sale on the markets.


However, you should understand the actual differences between marital and separate properties and why this could be extremely important to you in a divorce proceeding. This is a region that you may not be able to easily understand.


Most states differ when it comes to divorce details. Separate property may actually lose its luster of separate property in a court of law if you commingle your marital property with your separate property or vice versa. Marital property consists of all assets and income acquired during the marriage and it doesn’t matter which spouse obtained the property. Some examples may include: 1) 401ks; 2) Bonuses; 3) Country Club memberships; 4) Life insurance and Annuities.


You may think that just because your separate property increases in its value during the marital union status, then the property increase isn’t included in the marital assets. This simply just isn’t true. However, most states will distinguish between passive and active appreciation when the court should decide if the property increase should actually be marital property during a divorce proceeding.


Passive appreciation is defined as property appreciation that is considered outside strengths such as the inflation of supply and demand. However, if you used your asset to pay the house mortgage payment and/or your marital monetary income then you could have a legal argument during a divorce proceeding.


Active appreciation is the appreciation that is in part or that is due to the indirect or direct efforts or contributions of the other spouse. Your husband may have given business advice or a brilliant idea; he helped raise your children or did your chores around the house. Your husband could then have a legal argument in court due to active appreciation.


You should immediately consult with an attorney in any type of legal divorce proceeding. They could actually answer any questions about your marital division of the assets that you may have, including the ones about active or passive appreciation.


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