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Division of Assets

One of the most complicated and devastating parts of divorce is often the portion involving financial concerns. Therefore, it is important to understand some of the basics if you are considering divorce.   The following provides answers to common questions about assets and liabilities and the financial division in divorce, including which assets and liabilities are divided, the date used to value them, the valuation process and more.

In the divorce process, which assets and liabilities are divided?

In a vacuum (in other words, where there is no prenuptial or postnuptial agreement), a divorce will divide all assets and liabilities.  A divorce process includes all aspects of the marital estate.  The marital estate includes everything, even where something is titled in the name of just you or just your spouse.

When valuing marital assets, what date is used?

Generally, the court will use the date of filing for the divorce to value the assets and liabilities for purposes of division of the marital estate.

The valuation process

Clearly, some assets and liabilities are simple to value.  For assets such as bank accounts, you simply take the value at the date of valuation.  The same is true for things like credit card debt.  For other assets, such as property, that are not as easily and simply valued, the court will use the fair market value.  Fair market value is a term that is often used yet rarely understood.  The meaning of the term is the value that you could sell the item for on the market.  For example, if the item is a house, an appraisal will often be considered (although there are often negotiations and many other aspects are brought up in those negotiations).  For vehicles, generally Kelley Blue Book value will be used to determine the value.

Finally, how is the estate divided once the valuations are complete?

The simple answer is “equitably.”  The law in Indiana specifically states that in a divorce, the marital estate is to be divided equitably.  However, be sure to understand that “equitably” is not the same as “equally.”  In other words, “equitably” may very well mean a division that is far from a 50/50 split, however, it may also mean that a perfect 50/50 split is equitable.  In order to determine what is equitable, the court will likely consider a variety of other factors. One factor that might be considered by the court is the earning capabilities of each party.  For example, if one party is a real estate developer capable of making millions each year, while the other party never went to college, the court will likely consider splitting the marital estate in favor of the second party.  Another factor that might be considered include the contributions from each party at the start of the marriage and any contributions that came by gift or inheritance to only one of the parties.

If you or someone you know is getting a divorce or considering a divorce, it is important to have an experienced family law attorney on your side to help guide you through these process and fight for your rights in court and out of court.  Contact our office to find out how we might be able to help you.



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