Most couples worry about asset division when heading toward divorce. However, the issue is more important for those with significant assets, such as a business, real estate or retirement accounts.
In these cases, the split has a considerable impact on each party’s financial future. For that reason, divorcing couples should understand the guidelines for how courts divide assets.
Marital property vs. separate property
Marital property refers to assets and debts that the couple accumulated during the marriage. Such items are usually marital property, regardless of whose name is on the title. This includes real estate, vehicles, financial accounts and shares of ownership in a business.
On the other hand, separate property encompasses assets either partner acquired before the marriage. Separate property also includes anything a spouse receives as a gift or inheritance during the marriage.
However, certain factors can turn separate property into marital property. For instance, if a spouse’s separate property appreciates in value during the marriage due to contributions from both parties, the increased value may be subject to division.
Equitable distribution in divorce
Georgia courts follow the principle of equitable distribution when dividing marital assets and debts. This means the judge tries to divide assets fairly but not necessarily equally. The court considers various factors, including the duration of the marriage, each spouse’s contributions, financial circumstances and future needs.
Property ownership and value
Asset ownership does not depend on whose name is on the documentation. Courts consider each spouse’s contributions to the acquisition, maintenance and improvement of assets. For instance, if one spouse manages a business while the other supports the household, both may have a claim to the business’s value.
Valuing assets can be complex, especially for businesses or assets with fluctuating values like investments. Courts may rely on appraisers to determine accurate valuations. The goal is to ensure a fair and equitable division that considers each spouse’s contributions and needs post-divorce.
Options for asset division
After valuing assets, courts may decide on various outcomes for asset division. These can include:
- One spouse buying out the other’s share of certain assets
- The court ordering the sale of assets and splitting the proceeds
- The court permitting co-ownership of certain assets with a delineation of rights and responsibilities
Of course, the process can become complex. However, spouses may be able to navigate divorce proceedings more effectively by grasping the principles behind asset division.