Divorce property laws
Divorce is regarded as a disintegration of the union of two people formed by marriage. This division is to be taken place for every aspect of the relationship, including social, economical and financial matters. Property division is one such aspect that is very crucial at the time of divorce. This division is governed by the divorce property laws.
n United States, the property distribution takes place on the basis of community property and equitable principle. Most of the states have accepted the principle of equitable property, while very few states still divide property on the basis of equality. The states that follow community property distribution, the property is divided in a 50:50 proportion. On the other hand, in equitable distribution states, this ratio could be 50:50, 40:60, 30:70 or any other value as the court divides the property in a manner that seems fair to it. So, every divorce case is handled individually in such states according to the relevant situations of the partners.
Factors considered in equitable distribution as per divorce property laws
Equitable distribution does not necessarily mean an equal division of assets. There are certain factors that play a vital role while determining the asset division. These matters are as follows:
Role as a homemaker
According to the court, keeping a house and bringing up children is work. When one spouse plays the role of a homemaker, this assists the other spouse to earn more money by working outside the house. So, the court considers this role as favorable for the homemaker spouse. If the homemaker spouse can prove that the role of a homemaker has caused them to miss a training or employment opportunity that would have resulted in more income, the court awards more property to such a homemaker.
Role as an earner
When a spouse works hard to acquire and maintain a property, this factor is in favor of such an earner, when property distribution is done. Consider that a person owns a family business and the value of the business is almost equal to the value of the family home. In such a scenario, the court generally awards the business to the one who has earned the business and the family home to the other spouse.
The court is of the opinion that the spouse who has more earning capacity can regain the money lost in a divorce more easily as compared to the spouse with less earning capacity. So, the court awards more marital property to the spouse with less earning capacity.
Consider a case where one of the spouses has considerably more non-marital property than the other. The court offers more marital property to the less wealthy spouse. In doing so, the court desires that both parties should maintain a comfortable condition after the divorce. But, the court makes sure that no partner will have undeserved advantage of this principle.
By means of a premarital agreement, the husband and wife can plan in advance how the property distribution should take place, in case they are divorced. Such a couple waives its rights to permit a court to consider several factors before splitting the property. The court judges the agreement and approves it if it is formed in a legally acceptable manner.
Effects of tax
Consider that as a part of the divorce property distribution, it is essential to sell the residence or stock in a company. This would result in capital gains tax. Then, the spouse who would pay this tax receives more property to make up for the loss due to tax payment. On the contrary, if the divorce proceedings result in a tax saving, the spouse who gets this tax benefit would get less property. As per the law, the court would take into account those tax effects that are specific and immediate and not those that would occur after many years.
Health and Age of Spouses
If one divorcing partner is of considerably more age than the other, the court may assign a larger proportion of the property to the elderly person. Likewise, if one of the spouses is sick, then the court allocates more property to the ill person.
Factors considered in equal distribution as per divorce property laws
Community property states to divide the property on an equal basis, do not consider the marital fault and financial conditions of the partner. The facts that relate to this type of distribution are:
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