Due to legal laws differing from state to state it isn’t possible to provide information on your financial legal standing on divorce, however we can give you and overview of the procedure and legalities you may come up against. Always remember that no two divorce cases are the same.
Some divorces have both spouses working off the same page and have all financial, family and personal issues agreed amicably – the best possible outcome if you can manage it. However there are some divorces where one spouse has no knowledge of the upcoming divorce and is totally taken by surprise. And then there are some whereby it is never going to be amicable. In any case, knowing your legal rights will help you know where things are going.
Here are some of the legal basics around the division of many and assets that are usually the same or very similar in all states and territories…
Property is often the biggie in divorce as it is most frequently the biggest asset owned by any couple. Most states have a flexible procedure when dividing up property. Although its assumed that property is cut in a 50/50 ratio, things like age, earnings of either spouse, debts, taxes and other factors can vary this ratio for either spouse. Be aware that just as assets can be split, so to can any debts be divided between both spouses. Where some states do split assets equally, there are some exclusions — assets that each spouse owned separately before the marriage are not generally included along with inheritances (although any capital gain in value over the marriage duration may be).
While it may seem that the courts have all the power as to what assets go to whom, your own decisions as a couple can also make a difference. Taking time as a couple to sit down and go through your own personal division of assets before you go to court can save lots of lots of money and stress on both of you.
What should you do before sitting down with legal counsel?
Anything you can organise, prepare and agree on in advance will reduce your legal bill. So it’s in the best interest of both parties to get started before involving lega.
1. Open fresh bank accounts
Both spouses should open new separate bank accounts and old joint accounts should be closed and money divided equally. Money can be a very touchy subject for some couples and this may lead them to try to hide cash and assets without the others knowledge. This may sound tempting but it’s both illegal and can hurt you in the long run.
2. Ensure joint assets are in joint names
If you don’t have your name on the title or deed of things like cars, houses and other valuable assets it can be hard to claim ownership of it. But if both names are written up for each of these you will have a legal claim to it. If this can be done beforehand, it can make life easier.
3. Build a fresh line of credit
If you’ve never owned a credit card and always used your partner’s credit line this should be the time to open one of your own. Ask at your bank about credit cards or other methods of building a fresh line of credit that’s solely in your name.
4. Divide family assets
Family assets may not be divided equally between both spouses and so this is something you both need to take care of now. If either of you inherited money, property or had a large pay-out of money before marriage, you both need to come to an agreement on how these will be split.
This can help speed things along when your case comes in front of the judge and save money and time in court. But be sure that any agreements you do make have both signatures claiming a legal right to each asset.
A simple Google Sheet can help you get organised and collaborate on the collection of information as both parties can work on it together. Google does track revisions, however we’d recommend downloading a copy regularly as you update it.
Insurance, pensions and other investments
Other finances will also need to be looked at and supporting documentation collected. You may need to make changes to insurance policies and pensions to represent your future standing. Just like cash and property, assets such as these will all have to be declared to avoid falling foul of the law by being seen as trying to hide assets.
The talking points of money and assets can be the hardest part of a divorce to get through. But by dividing all things in an amicable way you can make things a lot easier on both of you and save a lot of costs in mediation and/or litigation (legal action).
As well as helping everything go quickly and smoothly, sorting things out beforehand means that you both of you will still have some type of relationship after the divorce which is especially important if children are involved.