In general, when asked to divide the marital property of a divorcing couple, the court will attempt to make an equitable division of the property. In some cases, the divorcing couple will agree as to which of them should be awarded certain debts and assets. In other cases, the nature of the marital assets and debts make it easy for courts to make an equitable division. But when the marital assets include unique debts or assets, courts may need to ask additional questions in order to divide these items in a fair manner.
How Will a Court Divide Credit Card Debt?
Any debt that is acquired during the marriage is usually divided equally, so long as that debt was incurred for marital expenses. That is, if a divorcing couple has a large amount of credit card debt because they borrowed to purchase things for the marriage (food, clothing, shelter, etc.), a court will typically divide that total debt equally between the two parties. However, if the debts were incurred because of one party’s destructive habits (such as gambling, alcoholism, online dating, etc.), a court may assign those debts to the person who created them.
How Will a Court Divide a Family Business?
A court divides a family business by first considering whether the business was created before or after the marriage. If a business was created after the parties were married, that business is a marital asset and the value of the business will be divided between the parties. If the business was created before the marriage, the court will need to evaluate what increase or decrease in the value of the business occurred during the marriage. This is accomplished through the use of expert witnesses and the process called “discovery,” which requires divorcing parties to exchange certain information. This increase or decrease will then be split between the parties.
A family business that was created prior to the marriage will usually remain in the possession of the party that created it after the divorce. Business owners can also create a prenuptial agreement prior to marrying in order to protect their business. A valid prenuptial agreement can direct a court during a divorce on how assets like businesses are to be handled during a divorce.
How Will a Court Treat an Inheritance?
Inheritances are usually awarded to the individual who inherited the property or money. Problems arise, however, when inheritances become commingled with marital assets. Suppose that a spouse inherits $100,000 from a relative. So long as that $100,000 is kept in a separate account and not used for marital needs (like food, a home, etc.), the court will award the inheritance to the spouse that inherited it. But if the inheritance is commingled with marital funds (by placing them in a joint bank account from which the couple pays its bills, for instance), then it becomes more difficult for the person who inherited the funds to argue the entire amount of the inheritance should be awarded to him or her in a divorce.
The assistance of an attorney can helpful in protecting those assets that are important to you and ensuring that debts and obligations are properly divided between the parties. If you are considering a divorce or are involved in a divorce and are concerned with how marital assets will be divided, contact us for a consultation at (855) 516-1397.