How Will My Assets Be Divided During Divorce?
Divorce requires spouses to disentangle their lives together—including the financial arrangements of the marriage. Every state has unique laws for financial matters and divorce. Alabama divides assets according to equitable distribution standards.
Couples may agree about property division and require little help from lawyers, mediation, or the civil courts. However, other divorces are financially complex, including high-asset divorces. A divorce lawyer can guide you through the entire process and protect your rights during asset division and other important divorce matters.
Steps Involved in Property Division During Divorce
The property division process involves specific procedures.
A divorce attorney can walk you through every step, including:
- Identifying marital and individual property
- Determining the valuation of the property
- Navigating marital property division
Some spouses agree on these matters more readily than others. To ensure that you receive a fair financial outcome, you will want to understand more about how Alabama couples must split marital property and how to protect prized possessions or other personal assets.
Types of Assets: Separate and Marital
In Alabama, the courts recognize that a couple’s assets generally belong to both parties in a marriage. However, marital property does not include all assets belonging to each person. Therefore, a couple—and their lawyers—must determine which assets belong to the marriage or the spouses individually.
Personal property may include possessions each spouse owned before the marriage, such as vehicles or certain real estate investments. This could also include family heirlooms, art collections, or other inherited valuables that one spouse held privately before the marriage.
Some spouses can agree upon who owned what before the marriage. Additionally, couples who arranged a prenuptial agreement before the marriage will likely have a smoother process distinguishing personal property. However, many divorcing couples may require mediation or even the court’s assistance in separating individual and marital assets.
Types of Marital Property
Marital property can be the most complicated financial matter to address during a divorce. After all, if a couple lived together for 10 or 20 years, they likely shared many important assets, including shared investments, bank accounts, a family home or homes, and other property.
Alabama recognizes these marital assets:
- Bank accounts
- Retirement accounts
- Tax credits or refunds
- Family-owned businesses
Generally, the courts may determine that an asset is a marital property if it benefits both spouses during the marriage. Also, while debt is not an asset, debts may constitute marital property.
As mentioned, these determinations of what constitutes marital property can prove complex. For instance, one spouse could have held their own bank account before the marriage, but the other spouse actively managed the account during the marriage, making it a marital asset.
In another example, one spouse may have started a business before the marriage, then the other spouse got involved during the marriage. The business could then, too, form a shared asset. Again, having an attorney on your side can ensure a fair division of assets during mediation or in court.
Valuing Assets in a Divorce
There are two main asset valuation methods: by agreement of the couple or through an expert appraisal.
Other industry-specific tools can value assets. For example, you can determine the fair market value for vehicles by using the Kelley Blue Book or seeking a real estate appraisal.
Click to contact our divorce lawyers today
Equitable Distribution of Assets in an Alabama Divorce
Once the couple agrees on marital property, they must divide these assets. The couple may agree and readily accept the split. However, if they need outside help with these matters, the court may divide marital property based on equitable distribution principles.
In Alabama, equitable distribution can ensure fairness for both spouses. This does not necessarily mean that the property gets split 50/50, though. Several factors determine what fair distribution looks like in a divorce.
Factors that Determine Asset Distribution
Court judges in Alabama consider several factors when determining asset and debt distribution.
They may look at:
- How long the marriage lasted
- The standard of living the couple established in the marriage
- Each partner’s age and health needs
- Parental or household services each spouse provided
- How one or both spouses helped the other pursue an education or increased earnings
- Income earned by spouses
- Fault for the divorce
- Tax implications of the property division
- The children’s living arrangements
- Each spouse’s current and future needs in terms of income
The longer the marriage lasts, the more likely a court will determine something closer to a 50/50 split of assets. For instance, if a marriage only lasted six months, a judge may determine that the spouses are not entitled to a significant portion of each other’s property.
On the other hand, if a couple was together through most of their adult life, the court may be more likely to find that each spouse deserves a similar standard of living as they enjoyed during the marriage.
Complete a Free Case Evaluation form now
Considerations in High Asset Divorces
Significant financial assets can make the divorce contentious. It can also come with high financial stakes for both partners.
High-asset divorces can refer to situations where one partner has more significant financial assets than the other. One spouse may have substantial investments, own a business, or otherwise hold major financial assets. In other situations, both partners may hold significant assets.
For high net-worth divorces, tracking down paperwork and identifying all assets can consume significant time. You want an expert appraisal of certain assets. Finally, couples in high-asset divorces may want an attorney with experience handling these cases. A lawyer can help you navigate the complexities unique to these divorces.
Other Frequently Asked Financial Questions in Divorce Cases
Divorce lawyers understand that you likely face many pressing questions during a divorce. A lawyer can ensure you understand your rights and options. For now, consider the following answers to common asset division questions.
How Does Alabama Treat Debt During Property Division?
Couples can share debt in marriage, so the court may consider debt when distributing assets during a divorce. This means that spouses could split debt relatively equitably, depending on each spouse’s earning power and other factors.
However, the courts will exclude the previously existing debt from the shared marital obligations. If one or both spouses had debt before the marriage, that debt would likely revert to them.
Matters can get tricky when one spouse accumulated most of the debt, e.g., when both spouses shared a credit card, but one spouse used the credit card more frequently. Such situations could make both spouses responsible for the debt.
Who Will Get the Family Home?
In an ideal situation, a divorcing couple will work out who gets the family home. If they cannot agree, they can seek legal help through mediation or the court system.
When the courts must decide how to deal with the family home, they will consider factors such as:
- Who purchased the home originally
- Where the couple’s children will live and which spouse will provide primary childcare
- Each spouse’s earning power and income
- The health of each spouse
- Fault for the divorce
When children are involved, it can be a major guiding factor for which spouse keeps the home. After all, the courts may decide it’s in the child’s best interest to stay in the same school district. If the court awards one parent with primary physical custody, that parent may keep the house.
However, having a lawyer’s help can prove beneficial in determining this matter as well. If you want to remain in your family home, a lawyer can help you support an argument for that right.
Can I Seek Alimony, or Will I Need to Pay a Spouse?
Yes, a spouse can seek alimony payments. The court often awards alimony if one spouse will face financial challenges from a divorce. Alimony can help one spouse maintain their standard of living or grant them time to build their own financial footing.
However, many alimony arrangements last for a limited time. In general, alimony can last for no more than five years.
Will I Receive Child Support, or Will I Need to Pay Child Support?
Child support payments make both parents financially responsible for their children after a divorce. A spouse may need to make child support payments if the courts determine it.
In Alabama, the Income Shares Model guides child support calculations. This model considers how much the parents would likely spend on childcare, then splits this between the parents. However, the division is not necessarily even. The courts also consider each parent’s income to arrive at a proportional figure for childcare contributions. This is done through Rule 32.
The court can also consider other factors when determining child support payments, such as sole physical custody arrangements. After all, if one parent is caring for and housing the couple’s children, they may require financial support for the children’s day-to-day needs.
How a Family Law Attorney Can Help During a Divorce
As you may already know from experience, divorce can be complex, painful, and stressful to navigate. Moving on from marriage comes with emotional challenges on top of financial ones. You may wonder how to protect your rights, assets, and standard of living.
A family law attorney can answer those questions—and help ensure that you have a fair divorce process. They can represent you during meditation or before a judge, speaking for your best interests. A lawyer can make your voice heard.
If you anticipate that your divorce could prove contentious or if there is a history of abuse, seeking a lawyer’s help can prove highly beneficial. They will understand when an agreement is or isn’t fair, or when to push for your rights to property or child support payments.
- Review important divorce paperwork
- Help document that certain assets are marital property
- Separate your personal assets from marital property, such as prized possessions and inherited assets
- Help you make important decisions as you divide your assets with a partner
- Support your best interests in a high-asset divorce
- Seek alimony arrangements or protect you from unnecessary payments
- Ensure that you and your children receive the financial support you may need
- Protect you from another spouse’s debt obligations
You may only require help navigating certain property disputes, such as who gets the home. On the other hand, you may face many challenging disagreements, such as responsibility for debt, bank accounts, and whether a partner deserves retirement accounts or real estate investments.
In both scenarios, a lawyer can offer a neutral point of view as you navigate challenging matters and decisions through the divorce process. With a lawyer’s help, you can have peace of mind knowing that you have an advocate on your side from start to finish.
Types of Divorce Matters a Lawyer Can Assist With
A divorce can involve complicating factors and unique situations.
A divorce lawyer in Alabama can help you with:
- High asset divorces
- Military divorces
- Child custody and child support
- Modifications to child support or alimony orders
A lawyer can also help you enforce court-ordered agreements, such as child support payments or alimony.
If you have questions about a divorce lawyer’s services, many firms offer no-obligation evaluations. During this call, you can get answers to all your questions and begin to move forward with the divorce process, including asset division.