Greatest Hits
- (L)Earning What I'm Worth
- The Save-to-Spend Budget
- Salary Negotiation Post - Retraction
- Money Types: Carrie, Samantha, Miranda or Charlotte?
- How Jenny Earned $15,000 on eBay
- The Fashionomics of Retail Begging
- Create Other Income Streams
- Challenge: Wear Just Six Things
- Rx for a Bloated Budget
- Stop Wasting Time on Things That Will Never Make You Money
- End the Superwoman Syndrome
- The High Cost of Part-Time Work (+ working mom poll)
- Smash Student Loan Debt
- Prep for More Pay
- Personal Account: My Brain on Sales
- On Becoming a Financial Grown-up
- Pop Quiz from DailyWorth!
- Bouncing Back From Bankruptcy
- Personal Account: Gabrielle's Reflection on Worth
- To Coupon or Not?
Back Off My Assets
By MP Dunleavey Tuesday June 08, 2010
For worse, not better Divorce is rarely kind to women. You knew that already.
But women—even wealthy women like Tipper Gore—face special risks when a long-standing marriage falls apart.
"The biggest assets later in life are usually the couple's home and retirement accounts," says Jeffrey Landers, a certified divorce financial analyst in New York.
After years of saving and building household wealth together, how do you a) get your fair share now and b) protect your future security?
Yours, mine, ours
The first thing is to get clear on marital property laws in your state, as we covered here.
Most states have community property laws, which means that there is a "fair and equitable" distribution of assets. Alas, says Landers, that doesn't mean your share will be fair.
For today, we'll focus on the true value of household assets; retirement (a complicated calculation all its own) is next week.
Landers gives the example of an investment account worth $500,000 versus a house that's worth $500,000. They're not worth the same.
"The house has certain expenses: property taxes, fuel costs, maintenance," Landers says. "And if you sell the home, you could get hit with a big capital gains tax bill."
If you make $400,000 on the sale of your home, after subtracting the $250,000 capital gains exclusion for a single person, you would have to pay tax on $150,000. "At next year’s capital gains rate of 20%, that’s a $30,000 tax bill," Landers says.
Bottom line
You may not relate to Tipper Gore, but like millions of women, she invested decades of her life in her marriage and family. Know your financial rights so that you can recoup what you invested.
Question: If a man supported his family financially for 25 years, while his wife supported them domestically, is a 50-50 split of assets fair? Should he get more? Discuss here.
Jeffrey Landers is hosting a free seminar on June 15: Smart Financial Strategies For Pre-Divorced Women, in midtown NYC.
Comments
(26)
Subscribe to this comment's feed
Written by April, June 08, 2010
Absolutely, it's appropriate for a woman staying home to maintain family and household to get at least 50%. Very often, the woman has given up more (career, networking, time)to be a stay at home mom.
Written by Lauren, June 08, 2010
I'm Canadian, so most of this doesn't really apply to me, but the question at the end caught my attention - because I don't think it should be a question. Staying at home with the kids and keeping up on the housework is just as stressful and important as any 9-5 job. 50-50 is fair because they both contributed equally to the household, even if they contributed in different ways. Heck, some people will say that the one staying home had the harder job.
Oh, and who says the wife has to support domestically? My hubby's going to be a stay at home dad when I start school again in September. Even when I'm working from home, he does a lot of the domestic stuff.
Oh, and who says the wife has to support domestically? My hubby's going to be a stay at home dad when I start school again in September. Even when I'm working from home, he does a lot of the domestic stuff.
Written by Gina, June 08, 2010
Yes, a 50-50 split of assests is totally fair as long as you're willing to split the debt in half as well. My ex-husband agreed to give me half of all of his retirement but I also had to use that money to pay my half of our marital debt. After 3 years, I'm still paying it down slowly. In the meantime, he has filed bankruptcy and let the house go into foreclosure. My advice to every woman...know where you stand financially in your marriage. Try to gain a thorough knowledge of ALL accounts, even those with just his name on them. And, if you're unlucky enough to go through divorce,hire a reputable lawyer!
Written by bonseye, June 08, 2010
I'm right in the middle of this question right now. My husband owns a small business (corporation) and I ran the office for him for no pay. There is a pre-nup that says I don't get any of the business and that's fine because its been in his family since 1947. But he's claiming that everything we bought in 6 years of marriage is his because his business paid for it and that there is virtually no marital property, leaving me with just about nothing to get 1/2 of.
Written by Miranda Spencer, June 08, 2010
Someone who works in real estate told me capital gains tax doesn't apply if you've owned your home more than 2 years and then sell it at a profit. Does that vary state to state or what? Not having that tax would take a little of the sting out of the divorce debt.
Written by Nietzsche, June 08, 2010
Though I don't disagree that housekeeping and home maintenance is a stressful job, what about the woman (or man for that matter) who works full-time AND has the "2nd job" of home administration, moreso than their spouse? Should she/he get more thatn 50%?
Oh, and I agree wholeheartedly that IF the assets are split down the middle, so should the debt. In my divorce it seems that I got stuck with all of the liabilies while my deadbeat husband/father- of-my-child walked away clean as a whistle because I made more money than he did. Makes me want to slap those men that say "the woman ALWAYS get everything". In my friend's case, HE worked around the clock and his deadbeat wife sat at home supposedly to "raise the kids". While she sat on the couch eating chocolate and watching soaps, the kids raised themselves, and come divorce time SHE got everything and none of the debt.
Oh, and I agree wholeheartedly that IF the assets are split down the middle, so should the debt. In my divorce it seems that I got stuck with all of the liabilies while my deadbeat husband/father- of-my-child walked away clean as a whistle because I made more money than he did. Makes me want to slap those men that say "the woman ALWAYS get everything". In my friend's case, HE worked around the clock and his deadbeat wife sat at home supposedly to "raise the kids". While she sat on the couch eating chocolate and watching soaps, the kids raised themselves, and come divorce time SHE got everything and none of the debt.
Written by Marion, June 08, 2010
50/50 isn't always an equitable division of assets or debts. Other items that must be taken into account when determining the division of property is:
Length of the marriage
Health of the persons involved
Capacity to support ones self
This is the exact reason I constantly reinforce to my daughters that they must not rely on a man to support them. No one gets married thinking they will end up divorce, but it happens all the time. So should you stay with an abuser because you cannot support yourself and your children? Or what if you husband dies or ends up disabled? And financially supporting your family is now your responsibility.
Worrying about a division of martial assets will not so much of an issue if both spouses have the ability to support themselves and their family.
Length of the marriage
Health of the persons involved
Capacity to support ones self
This is the exact reason I constantly reinforce to my daughters that they must not rely on a man to support them. No one gets married thinking they will end up divorce, but it happens all the time. So should you stay with an abuser because you cannot support yourself and your children? Or what if you husband dies or ends up disabled? And financially supporting your family is now your responsibility.
Worrying about a division of martial assets will not so much of an issue if both spouses have the ability to support themselves and their family.
Written by Barbara, June 08, 2010
I really don't get why someone who didn't work, didn't contribute to the retirement fund should get half of it. MAYBE 25%.
If a man works his butt off to be the sole supporter for his family so that the wife can have a nice extended vacation, I think that nice long vacation (10, 15, 20 years) should be assigned a monetary value that would count towards her share of the marital assets.
Why can't the woman get a job post-divorce? Just because he supported her all along, does that really mean he should be forced to continue? How is that fair? How can he start his life over if he's still tied to her like that?
If a man works his butt off to be the sole supporter for his family so that the wife can have a nice extended vacation, I think that nice long vacation (10, 15, 20 years) should be assigned a monetary value that would count towards her share of the marital assets.
Why can't the woman get a job post-divorce? Just because he supported her all along, does that really mean he should be forced to continue? How is that fair? How can he start his life over if he's still tied to her like that?
Written by Petunia, June 08, 2010
@Miranda Spencer, you have it partly right. The capital gains exclusion on a primary residence is 250k single 500k mfj. In this example, the single person had a gain of 400k, excludes 250k, but pays on 150k.
I divorced in 2005 after 18 years of marriage. It was not a 50/50 split, it was more a 67/33 split, but my third was liquid (cash, retirement monies) whereas his two thirds were not. I suggested it, he agreed, we were both happy with our property settlement.
It is so, so important for women to think about this and pay attention to the details. You don't know what life may throw at you; you have to watch out for yourself.
I divorced in 2005 after 18 years of marriage. It was not a 50/50 split, it was more a 67/33 split, but my third was liquid (cash, retirement monies) whereas his two thirds were not. I suggested it, he agreed, we were both happy with our property settlement.
It is so, so important for women to think about this and pay attention to the details. You don't know what life may throw at you; you have to watch out for yourself.
Written by Oceana, June 08, 2010
I feel that the career of being a stay at home mother actually is more than one career. It is several careers, and all of them are funded by the partner who goes to work each day.
That said, I do believe that the parent staying home should get minimum 50%, and possibly more.
If the woman wasn't home raising the children, clipping the coupons, managing the finances, and handling all of the life planning and chaufferring, cleaning, and shopping...several people would have had to be hired to do this amount of work. Add that up!
That said, I do believe that the parent staying home should get minimum 50%, and possibly more.
If the woman wasn't home raising the children, clipping the coupons, managing the finances, and handling all of the life planning and chaufferring, cleaning, and shopping...several people would have had to be hired to do this amount of work. Add that up!
Written by MP Dunleavey, June 08, 2010
I love Nietzsche's question:
"What about the woman (or man for that matter) who works full-time AND has the "2nd job" of home administration, moreso than their spouse? Should she/he get more thatn 50%?"
I think we're talking about a whole new way of writing pre-nups.
@Barbara--you're kidding, right?
@Miranda, whenever you sell a home, some or all of the profit is excluded from capital gains tax. If you're single, up to $250K is excluded (i.e. not taxed); if you're married, up to $500K in profit is not taxed. Here's a good story on Bankrate: http://www.bankrate.com/financ...ers-1.aspx
"What about the woman (or man for that matter) who works full-time AND has the "2nd job" of home administration, moreso than their spouse? Should she/he get more thatn 50%?"
I think we're talking about a whole new way of writing pre-nups.
@Barbara--you're kidding, right?
@Miranda, whenever you sell a home, some or all of the profit is excluded from capital gains tax. If you're single, up to $250K is excluded (i.e. not taxed); if you're married, up to $500K in profit is not taxed. Here's a good story on Bankrate: http://www.bankrate.com/financ...ers-1.aspx
Written by Jennifer, June 08, 2010
Barbara, you've got to be kidding me!!! When you say the woman at home gets a nice extended vaction, surely you must be talking about some sort of well-kept woman, not a stay-at-home mom!!! A mom at home NEVER gets time off. I don't get to leave at the end of the day, I don't get weekends off, I am even on call all night long. 24/7/365!! I do not mind doing this, I chose this and I love being a good mom. However, DO NOT belittle my hard work by suggesting I am on an extended vacation!!!
On topic, I think that if the children are not in school yet, it is more difficult for a mom to just "get a job" when you would then have to take into account the childcare issue. If the children are in school and the mom can pick her career back up, then it should be sufficient for the man to help pay for the school/childcare but not the wife's lifestyle. It is very hard to pin down any numbers to such a situation.
On topic, I think that if the children are not in school yet, it is more difficult for a mom to just "get a job" when you would then have to take into account the childcare issue. If the children are in school and the mom can pick her career back up, then it should be sufficient for the man to help pay for the school/childcare but not the wife's lifestyle. It is very hard to pin down any numbers to such a situation.
Written by Lauren, June 08, 2010
@ Barbara, I agree that if someone stays at home doing nothing they deserve nothing... but house maintenance and child rearing is far from a vacation.
Really, I don't understand the whole divorce thing. I mean, I understand people breaking up, but I don't understand the need for the evil vengeful side of it. I don't understand how two people who shared a life can't just sort it out like adults.
I mean, if my husband and I decided to get divorced, he'd get his stuff and I'd get mine. As far as assets go, we'd sort it out so that we each got what we needed. We'd probably even work together to get another apartment close to the first so that our son could easily go between the two places. I'd get the car so I could go to work, he'd get the money he needs to survive with his disability. Honestly, the only major change would be one of us moving out and me having to work more to pay rent and bills.
But that's just me... I never understood kids not talking to their exes in high school, either.
Really, I don't understand the whole divorce thing. I mean, I understand people breaking up, but I don't understand the need for the evil vengeful side of it. I don't understand how two people who shared a life can't just sort it out like adults.
I mean, if my husband and I decided to get divorced, he'd get his stuff and I'd get mine. As far as assets go, we'd sort it out so that we each got what we needed. We'd probably even work together to get another apartment close to the first so that our son could easily go between the two places. I'd get the car so I could go to work, he'd get the money he needs to survive with his disability. Honestly, the only major change would be one of us moving out and me having to work more to pay rent and bills.
But that's just me... I never understood kids not talking to their exes in high school, either.
Written by Petunia, June 08, 2010
@ Barbara - I have a hard time believing you ever stayed home full-time to raise a child(ren). I believe if you had, you'd realize it is no vacation.
@ the capital gains exclusion - If you own a rental house which has appreciated and you want to sell, you should consider moving in for 2 years (possibly less if you had lived in it at one time) in order to qualify for the exclusion. Keep in mind you can use the exclusion only once every 2 years.
@ the capital gains exclusion - If you own a rental house which has appreciated and you want to sell, you should consider moving in for 2 years (possibly less if you had lived in it at one time) in order to qualify for the exclusion. Keep in mind you can use the exclusion only once every 2 years.
Written by Kenia, June 08, 2010
@Barbara - Maybe you're referring to a stay-at-home wife with no kids? Even then, for two people, cleaning, cooking, laundry, handling bills/finances is NOT a vacation, although I can see it being less work than if there were kids to take care of (twice the cleaning, more than twice the laundry, now there's chauferring too, etc, etc).
Running a home and raising children is WORK (as much as you may CHOOSE that life, and LOVE your children, and WANT to care for them & your partner). The husband may be bringing home money to support her, but a stay at home mom is providing SERVICES to support HIM (& the kids, if there are any).
Running a home and raising children is WORK (as much as you may CHOOSE that life, and LOVE your children, and WANT to care for them & your partner). The husband may be bringing home money to support her, but a stay at home mom is providing SERVICES to support HIM (& the kids, if there are any).
Written by Kathy, June 08, 2010
It sounds like Barbara is dating a divorced or soon to be divorced man.
Lauren, I don't mean to imply you will ever be divorced but it's obvious you've never gone through the process.
In my case, my meek mild husband turned into the Tasmanian Devil.
Lauren, I don't mean to imply you will ever be divorced but it's obvious you've never gone through the process.
In my case, my meek mild husband turned into the Tasmanian Devil.
Written by Lauren, June 08, 2010
I'm just saying that I don't think it's absolutely horrible for everyone. In fact, I know a few people who were able to work it out on their own, and in two out of three of the cases they ended up being friends.
Everyone lets their anger get the better of them sometimes, but I like to think that we'd put our son first and we wouldn't fight over things that we didn't actually need.
Everyone lets their anger get the better of them sometimes, but I like to think that we'd put our son first and we wouldn't fight over things that we didn't actually need.
Written by Petunia, June 08, 2010
@ Kathy - Ah yes, I'm sure you nailed it.
@ Lauren - I hear what you are saying. My ex-husband and I agreed to put aside our issues and focus on our kiddos. After all, the marriage was over. For the most part, we have been able to do that.
However, typically people are very hurt and angry during a divorce, which makes it easier said than done (to be mature and work out an amicable agreement). Also, each of us can only control ourselves. If one spouse decides to be difficult and disagreeable at every turn, there isn't much the other spouse can do to stop them.
One thing that folks should keep in mind: the two of you have whatever assets you have. Legal battles do not increase the total pot, quite the opposite! Also, life is seldom perfectly fair. If you can work out a reasonable agreement, consider yourself lucky, cut your losses and move on.
@ Lauren - I hear what you are saying. My ex-husband and I agreed to put aside our issues and focus on our kiddos. After all, the marriage was over. For the most part, we have been able to do that.
However, typically people are very hurt and angry during a divorce, which makes it easier said than done (to be mature and work out an amicable agreement). Also, each of us can only control ourselves. If one spouse decides to be difficult and disagreeable at every turn, there isn't much the other spouse can do to stop them.
One thing that folks should keep in mind: the two of you have whatever assets you have. Legal battles do not increase the total pot, quite the opposite! Also, life is seldom perfectly fair. If you can work out a reasonable agreement, consider yourself lucky, cut your losses and move on.
Written by Trudy, June 08, 2010
In regards to being a stay-at-home mom, it's only a vacation in the sense that I was free from the stress and deadlines of a job outside the home. But the work of raising children wore me out! After 6 children, 2 miscarriages and 23 years I was divorced and accepted less than what would have been a fair split out of fear of my ex and stupidity. I even allowed him to threaten me into not going for custody, because he didn't want a working/student mother raising the children! It took me 6 years to finish college and get a Master's degree, then another 3 years to land a job. Now at 58, I am wishing I could retire as some of my colleagues are. I am slowing down, and recently had to undergo hysterectomy and prolapse surgeries, needing 4-6 weeks medical leave. But I can't retire until I at least pay off my student loan! I'm not sure what I am trying to say here, but I definately have had to learn the hard way. If it weren't for the self confidence I gained from finishing school and being emoyed, I sometimes wonder if it worth the wear and tear on my health. I am now remarried to a nice man much older than me, which has it's problems. But I am learning to manage our budget better and am not giving up on having some of the dreams I had as a younger woman. But how nice it would be to be able to retire, enjoy my grandkids and making our house a home! Just can't do it...too much debt from school loan.
Written by Trudy, June 08, 2010
Sorry for getting off the subject there. No, I don't think the man should get more. I think everybody should be honest and fair. The contribution of both partners is valuable. But a woman in that situation, as I was, gives up many years of being able to develop her self-sufficiency, career, financial stability. If the marriage breaks up, she needs a chance to advance.
Written by Jaime, June 08, 2010
Every situation is different, but I feel that people often assume that the woman in the couple insists on staying home and the man reluctantly works hard to support the family. I'm sure that is true sometimes but I think more often it is more of a mutual decision. In the case of my oldest sister and my mother, both of their husbands wanted them to be a stay at home mom. If divorce should happen, I would certainly expect both of them to receive equitable financial consideration.
Stay at home moms (and dads) can make a lot of financial contributions to the marriage, even if they're not bringing home a paycheck. In my sister's case, her being a SAHM means she can be flexible which has had a direct and positive effect on her husband's career. A situation that is often born out amongst higher power and wealthier couples than my sister and her husband.
That said, my personal feelings are mixed on the subject. I think if both partners want it and they can afford to make it happen, kudos to them. I think it's healthier financially and psychologically though, if both parties pursue some kind of traditional work or charity work or creative endeavors outside the home/kids once the kids are old enough not to "need" constant care.
Only the couple knows how they feel about their roles and how voluntary it all is. But, it comes down to this. No one HAS to get married. If you decide to tie the knot, joining lives and finances and then divorce - no matter how disprportionately the work load and salary earnings were, you are both entitled to half. half the assets and half the liabilities. Afterall, when you get married you don't say "I'm a better person/bigger earner/harder worker so I'm representing 75% of this couple and you're just 25%". You say that you're joining two halves of a whole.
Stay at home moms (and dads) can make a lot of financial contributions to the marriage, even if they're not bringing home a paycheck. In my sister's case, her being a SAHM means she can be flexible which has had a direct and positive effect on her husband's career. A situation that is often born out amongst higher power and wealthier couples than my sister and her husband.
That said, my personal feelings are mixed on the subject. I think if both partners want it and they can afford to make it happen, kudos to them. I think it's healthier financially and psychologically though, if both parties pursue some kind of traditional work or charity work or creative endeavors outside the home/kids once the kids are old enough not to "need" constant care.
Only the couple knows how they feel about their roles and how voluntary it all is. But, it comes down to this. No one HAS to get married. If you decide to tie the knot, joining lives and finances and then divorce - no matter how disprportionately the work load and salary earnings were, you are both entitled to half. half the assets and half the liabilities. Afterall, when you get married you don't say "I'm a better person/bigger earner/harder worker so I'm representing 75% of this couple and you're just 25%". You say that you're joining two halves of a whole.
Written by Denise, June 08, 2010
Each family has it's own story & personalities.
I read somewhere that
'Life is a coin, you can spend it any way you want,But you can only spend it ONCE.
I read somewhere that
'Life is a coin, you can spend it any way you want,But you can only spend it ONCE.
Written by Jeff Landers, June 09, 2010
Lots of very interesting comments to this post!
In general, the laws of all states say that ALL property acquired during the marriage is marital property. In the 9 Community Property states (such as California and Texas), the property is pretty much divided 50-50 upon divorce. However in the other 41 Equitable Distribution states (equitable means fair, but not necessarily equal) the split upon divorce can be greater or less than 50-50 depending on the term of the marriage (long-term marriages are typically considered to be 10 years or longer) and a variety of other factors.
There are a few exception to the above, especially as it relates to what is known as separate property (property that was acquired before the marriage and/or property that was acquired during the marriage through inheritance or by a gift from a third party) or if there was a prenup or post-nup agreement. Even in the case of separate property, in many, if not most cases, the appreciation of that property during the marriage is also considered marital property.
Here is the most important thing to remember about marital property. It doesn't matter who bought it or whose name the property was in, it is still marital property if it was acquired during the marriage (there are some exceptions if something was bought solely with the funds that came from the sale of separate property). So your spouse's 401K, IRAs, real estate titled in their name, pension plans, stock options, businesses, professional licenses (doctor, lawyer, architect, etc.), even advanced degrees are marital property if acquired during the marriage. And even if, for example, some of your spouse's 401K or pension plan was started or in existence before your marriage, the portion that was added after your marriage (and in most cases, the appreciation on the pre-marital portion) is marital property and is subject to a 50-50 split upon divorce.
It also doesn't matter, if one spouse did not have a job outside of the home. Under the law, a marriage is considered an equal partnership and you are still are still entitled to your equal or equitable share.
In fact, if you have been married for 10 years or longer and have been out of the workforce for many years (due to raising a family) or are working, but there is a big disparity between your income and your spouse's, you may be entitled to alimony in addition to the property split as described above.
In general, the purpose of alimony is to allow the "economically disadvantaged spouse" (don't be fooled by this terminology - Tipper Gore is the "economically disadvantaged spouse" even with her millions) to have a lifestyle post-divorce that is relatively comparable to what her lifestyle was before the divorce. The amount of alimony and the length of time that you will receive that alimony is subject to a number of factors including length of marriage, the amount of property received in the property split, your need for the alimony (if you job provides you with a salary that allows you to maintain your previous lifestyle or close to it, you may not be entitled to alimony) and, of course, your spouse's ability to pay. If you need $5000 per month, but your spouse can only verifiably afford $3000 per month, then you will not be able to get $5000 per month in alimony. HOWEVER, if there is sufficient property available, you may be able to get more than the 50% share of the property, as described earlier, to make up for the $2000 per month shortfall!!!
So what's my advice to everyone? Do not short-change yourself. There are many myths and misperceptions about divorce, the division of property, alimony, etc. Do not make any assumptions of what you may or may not be entitled to. If you have been in a long-term marriage, been out of the workforce for many years (or if you are working, but make substantially less than your spouse), are older (50+), then you absolutely owe it to yourself to get this right. In most cases there are no do-overs. The settlement you negotiate now will affect the quality of the rest of your life and your retirement years.
And please don't assume that an attorney will be able to help you in a significant way with the financial part of your divorce. They do not teach financial analysis in law school (I went to law school, so I know). In fact, many divorce attorneys have said they went into law because they were lousy at math!!
You need to hire a financial advisor that specializes in divorce and has received specialized education and training (yes, someone like me!). A qualified financial advisor will analyze all of the assets/debt, your income and expenses and do a projection 5, 10, 15 20, even 30 years into the future to see if you will be financially OK with the proposed divorce settlement proposal. I work very closely with my clients' attorneys to give them all the financial ammunition they need to negotiate with the other side to get the best possible settlement (property and alimony) for our clients. If you want to make sure that you will be financially OK now and in the future, you need to do the same.
Please feel free to contact me with any questions. You can email me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or call me at 917-602-6977.
In general, the laws of all states say that ALL property acquired during the marriage is marital property. In the 9 Community Property states (such as California and Texas), the property is pretty much divided 50-50 upon divorce. However in the other 41 Equitable Distribution states (equitable means fair, but not necessarily equal) the split upon divorce can be greater or less than 50-50 depending on the term of the marriage (long-term marriages are typically considered to be 10 years or longer) and a variety of other factors.
There are a few exception to the above, especially as it relates to what is known as separate property (property that was acquired before the marriage and/or property that was acquired during the marriage through inheritance or by a gift from a third party) or if there was a prenup or post-nup agreement. Even in the case of separate property, in many, if not most cases, the appreciation of that property during the marriage is also considered marital property.
Here is the most important thing to remember about marital property. It doesn't matter who bought it or whose name the property was in, it is still marital property if it was acquired during the marriage (there are some exceptions if something was bought solely with the funds that came from the sale of separate property). So your spouse's 401K, IRAs, real estate titled in their name, pension plans, stock options, businesses, professional licenses (doctor, lawyer, architect, etc.), even advanced degrees are marital property if acquired during the marriage. And even if, for example, some of your spouse's 401K or pension plan was started or in existence before your marriage, the portion that was added after your marriage (and in most cases, the appreciation on the pre-marital portion) is marital property and is subject to a 50-50 split upon divorce.
It also doesn't matter, if one spouse did not have a job outside of the home. Under the law, a marriage is considered an equal partnership and you are still are still entitled to your equal or equitable share.
In fact, if you have been married for 10 years or longer and have been out of the workforce for many years (due to raising a family) or are working, but there is a big disparity between your income and your spouse's, you may be entitled to alimony in addition to the property split as described above.
In general, the purpose of alimony is to allow the "economically disadvantaged spouse" (don't be fooled by this terminology - Tipper Gore is the "economically disadvantaged spouse" even with her millions) to have a lifestyle post-divorce that is relatively comparable to what her lifestyle was before the divorce. The amount of alimony and the length of time that you will receive that alimony is subject to a number of factors including length of marriage, the amount of property received in the property split, your need for the alimony (if you job provides you with a salary that allows you to maintain your previous lifestyle or close to it, you may not be entitled to alimony) and, of course, your spouse's ability to pay. If you need $5000 per month, but your spouse can only verifiably afford $3000 per month, then you will not be able to get $5000 per month in alimony. HOWEVER, if there is sufficient property available, you may be able to get more than the 50% share of the property, as described earlier, to make up for the $2000 per month shortfall!!!
So what's my advice to everyone? Do not short-change yourself. There are many myths and misperceptions about divorce, the division of property, alimony, etc. Do not make any assumptions of what you may or may not be entitled to. If you have been in a long-term marriage, been out of the workforce for many years (or if you are working, but make substantially less than your spouse), are older (50+), then you absolutely owe it to yourself to get this right. In most cases there are no do-overs. The settlement you negotiate now will affect the quality of the rest of your life and your retirement years.
And please don't assume that an attorney will be able to help you in a significant way with the financial part of your divorce. They do not teach financial analysis in law school (I went to law school, so I know). In fact, many divorce attorneys have said they went into law because they were lousy at math!!
You need to hire a financial advisor that specializes in divorce and has received specialized education and training (yes, someone like me!). A qualified financial advisor will analyze all of the assets/debt, your income and expenses and do a projection 5, 10, 15 20, even 30 years into the future to see if you will be financially OK with the proposed divorce settlement proposal. I work very closely with my clients' attorneys to give them all the financial ammunition they need to negotiate with the other side to get the best possible settlement (property and alimony) for our clients. If you want to make sure that you will be financially OK now and in the future, you need to do the same.
Please feel free to contact me with any questions. You can email me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or call me at 917-602-6977.
Written by alex winter, June 09, 2010
He can also depreciate the property on her tax return as well a deduct all the repairs, maintenance, insurance premiums or any other expenses of the property. Thank you ;).
Written by Kathy, June 10, 2010
Watch out for the self employed husband! He can claim just about any income and it can be very difficult to prove otherwise, and the judge will believe him. I just received the judgement on my divorce after 16yrs of marriage. Because he was all 'under the table' as a contractor and I was all 'above board' as a registered nurse, he makes out well financially, while I suffer. This is definitely not 'equitable distrubution'.I was told I can appeal but it's very expensive. I had been saying to myself all along, 'whatever the judge decides, I'm sure will be fair'. I had a lot of faith in the judicial system. Not anymore!
Written by Trish, June 29, 2010
So, what about the women whose husbands have been cheating on them for years? That's where I am, right along side Sandra and Elin except I have been married 30 years and am not wealthy. Like many women in the 50+ range, I have been discarded for younger women....and yes, I intended that to be plural. I'm going to try to get every penny I can....I was deceived for 30 years, only found out about all the infidelity recently. Once my son (age 22) is out of the house and living on his own, I don't care if my ex is living in a cardboard box under a bridge. Come to think of it, that would be a good place for a snake to be.
