April 23rd, 2023
April 23rd, 2023
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4.8 - 2 votes
There are two parts to every divorce. The first part is the termination of the marital relationship itself by a court decree. The second part consists of dividing the house, cars, furniture, bank accounts, and other assets; providing for the payment of spousal support; and settling issues of child support, custody, and visitation rights if children are involved. This is all incorporated into the final Divorce Agreement. This guide will cover all of the issues related to divorce that do not involve children: property division and spousal support. To find more information about getting divorced with children in the mix, the How to Handle Kids in Divorce guide provides information about child support, custody, and visitation.
The division of marital assets is referred to as the "property settlement." The divorce and the property settlement do not necessarily have to take place at the same time; however, the settlement is often incorporated into the divorce or separation agreement itself. Division of property does not always mean a physical division. Rather, each spouse gets a percentage of the total value of the property. Each spouse can then take items whose value adds up to this percentage. For larger assets, such as homes and vehicles, the couple will often decide the ownership interest in the asset as a percentage to each spouse and then one spouse will buy out the other's interest so that they can keep the asset. It is common for a divorcing couple to decide how to divide their property and debts themselves, rather than leaving it to a judge. However, if the Parties cannot agree on how to divide the property, they can submit their property dispute to the court and then a judge will do it for them using state law to decide. The manner in which the assets acquired during a marriage are distributed can differ greatly from state to state. Forty-one states and the District of Columbia are so-called "equitable distribution" states, while the other nine states are "community property" states.
Years ago, when a married couple divorced, who got what depended on where the money to buy each asset originally came from. Everything a spouse earned or received (such as gifts or inheritance) during the marriage was their own separate property. Further, anything bought with those earnings was that spouse's separate property. For example, if the family home was purchased using the husband's earnings, it was his and his alone, and the wife had no claim to it.
Strict separate property laws frequently led to unfair results, so a new rule -- equitable distribution -- was developed to remedy this imbalance. Under the equitable distribution rule, the judge looks at the assets of the couple, the length of the marriage, and the contributions each party made during the marriage and then divides the property in a fair and just manner. Assets, earnings, and debts accumulated during the marriage are divided fairly. Sometimes this means the assets are divided equally, but just as often it does not. In practice, often two-thirds of the assets go to the higher wage earner/contributor and one-third go to the other spouse. Equitable distribution principles are followed in the District of Columbia and the majority of states (all states except for Arizona, California, Idaho, New Mexico, Nevada, Texas, Washington, Wisconsin, and, under some circumstances, Alaska).
In nine states -- Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington, and Wisconsin (plus Alaska, by written agreement of the married couple) -- the division of assets happens according to the community property philosophy. Community property is a split right down the middle, which each spouse receiving an equal share. Community property generally includes everything owned or acquired by a couple during the marriage. For example, the wages earned by one spouse during a marriage are considered community property. If a house is bought with those wages, the house is also community property, and each spouse has equal ownership of that house, even if only one spouse worked during the marriage. All debts incurred during the marriage, unless the creditor is specifically looking to the separate property of one spouse for payment, are considered community property debts.
Under community property, anything owned before marriage is considered that spouse's separate property, as are gifts and inheritances received during the marriage. Separate property includes personal injury awards received by one spouse and proceeds of a pension that vested (that is, the pensioner became legally entitled to receive it) before the marriage. Property purchased with the separate funds of a spouse remains that spouse's separate property, though states differ on whether income from separate property (such as rent or dividends) is separate or community property. A business owned by one spouse before the marriage remains their separate property during the marriage, although a portion of it may be considered community property if the business increased in value during the marriage or both spouses contributed to its worth.
Problems can arise when separate property is mixed with community property. However, property purchased with a combination of separate and community funds is considered partly community property and partly separate property, as long as a spouse is able to show that some separate funds were used. Separate property mixed together with community property generally becomes community property.
When dividing assets, only the community property is divided; separate property remains the property of the spouse who owns it. In dividing the community property and figuring out spousal and child support, judges often consider the amount of separate property either of the parties owns.
Spousal support, also known as "alimony," is money one spouse pays to the other to help support them after the divorce. A couple can come to their own agreement about whether spousal support has to be paid, how much should be paid, and how long those payments should continue. However, if the couple has trouble agreeing on any of these issues, a judge can decide. Generally, spousal support is used to get the lower-earning spouse back on their feet and able to support themselves, especially if they have been out of the workforce for a period of time during the marriage. At one time, it was almost always the husband who wound up paying spousal support to their wife. Today, however, when both spouses have a history of work, spousal support is less likely to be awarded or, if it is awarded, it is less than if the wife had stayed home taking care of the kids for most of the relationship. Today, some men take on the role of primary caregiver for their children and are entitled to collect spousal support until they are retrained and can enter the modern marketplace.
Normally, we think of spousal support in terms of monthly payments, but any other means of payment that the parties agree to or the court orders -- such as quarterly or annual payments -- are possible. Sometimes a spouse will accept a single, lump sum payment of spousal support and the bulk of the community property in place of future monthly support payments. When this happens, the other spouse should make sure they are not giving away too much too fast in order to get out of an unpleasant situation.
There is no set formula for determining how much spousal support, if any, must be paid in a particular case. The support may range from nothing at all to half of what the other spouse makes. When a judge is making this determination, they look at all of the circumstances of each case before making a decision. Some of the factors a judge considers are:
Obviously, a fifty-year-old woman without a high school diploma who stayed home taking care of their children and grandchildren for the last thirty years is not as readily employable and self-supporting as a twenty-five-year-old woman who has a master's degree, no children, and has been working throughout a three-year marriage. A higher amount of spousal support is often awarded for the time a spouse is being trained for the current job market.
Another factor taken into consideration is the overall standard of living the couple enjoyed during the marriage. While most people have heard that the wife (or husband, if he was the primary caregiver) is entitled to be supported "in the manner to which they have become accustomed," it is rarely possible for either party to continue to live in the same style after a divorce. Earnings that previously supported only one household must now be stretched to two. To allow either spouse to continue living in their accustomed manner could mean that as much as 70 percent or more of the other's paycheck would have to be turned over. Except in cases of very wealthy couples, a divorce will reduce both parties' standard of living for a while.
When being decided by a judge, they may also consider the fault of the parties in determining spousal support. In some states, when a divorce is granted because of one spouse's adultery, that spouse cannot receive any alimony. If an unfaithful spouse is required to pay alimony to the other spouse, the judge may take that misconduct into consideration and order larger payments.
The amount of spousal support payments can be changed by agreement of the parties, or by the judge upon the request of either party, but only if they can demonstrate that their circumstances have changed.
Only court-ordered spousal support payments can be changed by the judge. If a property settlement agreement or divorce agreement spells out the terms of spousal support, the court generally cannot modify it.
The spouse who is paying the spousal support will often ask for a reduction if they are out of work or disabled for a time, demoted to a job that pays less, or retired, especially if the retirement is related to their health. A reduction in the amount of spousal support is often requested if the spouse receiving it begins earning substantially more money than before. The spouse receiving the spousal support usually has a much harder time getting the payments increased by court order. That the other spouse who is paying the support received a raise or suddenly came into a great deal of money ordinarily is not a good enough reason for the court to increase spousal support. The spousal receiving the spousal support must show that their own situation has changed sufficiently to justify an increase in spousal support.
If one of the parties fails to pay the agreed-upon spousal support, the party who is owed support can send a Spousal Support Demand Letter to get notice in writing before heading to court to have the agreement enforced by a judge.
How long must spousal support payments be made? For as long as the court orders (unless modified) or the parties have agreed that it should as part of their property or divorce settlement. Spousal support stops when the spouse receiving it dies or, usually, when they remarry. If the new marriage is terminated by an annulment, however, spousal support can be reinstated in some cases.
Spousal support payments end in some states if the spouse receiving the payments has been living with a romantic partner for a certain period of time, such as thirty days. Other states apply the rule that if a couple presents themselves to others as a married couple, the former spouse's obligation to pay spousal support ends. One court ruled that signing a hotel register as "Mr. and Mrs." was sufficient to show that the couple presented themselves to the public as married, and accordingly cut off spousal support payments.
In many states, the obligation to pay spousal support ends with the death of the person who is obligated to make payments. In some states, however, the obligation to pay future spousal support can be enforced against the deceased former spouse's estate. But if the person doesn't leave much of an estate, a judgment against it doesn't have much practical force. Often, divorcing couples include a provision in the divorce agreement stating that the spouse who is paying spousal support must maintain a life insurance policy insuring their life with the proceeds payable to the spouse who is collecting support. This way, if the spouse dies before fulfilling their entire obligation, the other spouse will still be protected.
Using a life insurance policy as a type of protection is usually only available if it is agreed to as part of a property or divorce settlement. A judge generally does not have the power to order a spouse to insure their life to guarantee alimony payments.
Divorce is often an incredibly stressful process. However, it generally breaks down into two main issue areas when children are not involved:
About the Author: Malissa Durham is a Legal Templates Programmer and Attorney at Wonder.Legal and is based in the U.S.A.