Dividing Property and Debts

Headshot of Margy Klaw

This is part three of an ongoing series about being financially prepared for a divorce. Read part one here, and part two here.

You’ve embarked on your divorce; now the next step is to figure out the settlement.

Under the laws of your state, which assets and debts will be divided between you and your husband—and which belong solely to each of you?

Every state’s divorce laws are different, but they all have this in common: property and (for the most part) debts acquired during the marriage belong to both of you, regardless of title.  

Some states call this “community property” and presume it will be divided 50/50.  Some states call this “marital property” and call for a division that’sfair under the circumstances—“equitable distribution”—based on factors such as age, health, earning capacity, length of the marriage, etc.

Every state also has exceptions to this basic principle, e.g., inheritances or gifts to one of you might be excluded from the “marital pot.” 

Here’s the goal: figure out what’s in the pot to divide; understand how much you both earn or are capable of earning; make sure your lawyer explains clearly to you how the law in your state appliesto this picture; and come up with a proposal for settlement.

Divvy it up. Would you know what’s yours, in a divorce?

Margaret Klaw is a founding partner with Berner Klaw & Watson in Philadelphia. She blogs at Family Law Unraveled.

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