Divorce is a process, and property division is one key step. Often, couples are able to work this out between themselves. Sometimes, however, couples disagree on how their assets should be divided. Other times, it’s difficult to tell which assets are truly separate and which must be divided.
What Counts as Marital Property?
Marital property is anything that either spouse acquires after the date of marriage. It can include physical, tangible property such as a house, vehicles, artwork, and personal property. It can also include intangible property such as digital assets and investment accounts. It makes no difference which spouse has title to the property or purchased it in their name; if it was acquired after the marriage began, the court will usually view it as marital.
What Counts as Separate Property?
Separate property is that which belongs to one spouse only. There are different types of separate property in divorce, including: Anything that was owned prior to the date of marriage (and maintained as separate property during the marriage) Anything that the spouses decide, by way of a prenuptial agreement, will be treated as separate property in the event of a divorce Gifts and inheritances that are received during marriage and maintained as separate property.
How Courts Decide to Divide Property
States that follow equitable distribution principles aim at dividing marital property in a manner that is fair, but not necessarily equal. That is the case in Kansas under K.S.A. § 23-2802, and Kansas divorce attorneys will provide the documents that would enable the court to determine a property division that is equitable to both spouses. To do so, the court must take several factors into consideration. These may include:
- The age and health of both spouses
- How long the marriage lasted
- The economic circumstances of both spouses
- Both spouses’ present and future earning capacities
- The manner in which an item of property was acquired
- Any tax consequences of either spouse being given the property
- Contributions that either spouse made to the acquisition of property (e.g., being a stay-at-home spouse so the other spouse could earn more)
- Whether the parent who has custody of the children needs to reside in the marital residence
- Any misconduct on the part of either spouse (e.g., wasting marital property)
- The value of either spouse’s separate property
There may be other factors for the court to consider, depending on the unique circumstances of the divorce.
Potential Gray Areas When It Comes to Dividing Property
These are a few “gray areas” in property division that may give parties more room to argue. Some common scenarios include:
Gray Area #1 – Commingling of Funds
If a spouse owned a savings account before marriage, and never touched it after marriage, it is fairly easy to designate the account as that spouse’s separate property. It is more complex if funds from the other spouse are deposited into that bank account, or if money is later withdrawn to be used for marital expenses. When marital and separate property is mixed, it is known as commingling. Commingled assets are typically considered divisible.
Gray Area #2 – Appreciation of Separate Assets
Likewise, if a separate asset never appreciates any value, then it’s not too hard to decide it’s the separate property of whichever spouse had it before marriage. That is not necessarily so when that asset appreciates in value after marriage. The other spouse may claim that they took direct action to increase the value of the asset, and that they therefore deserve some portion of the appreciation.
Gray Area #3 – Family Businesses
If a business was the separate property of either spouse before marriage, and only they actively worked to increase its value, the court could decide to award the business to that spouse. But in reality, most family businesses do not operate this way. The other spouse inevitably becomes involved, directly or indirectly, and their labor, money, support, or goodwill could increase the value of the business substantially. This increase in value – or even the business as a whole – may end up being marital property.
Gray Area #4 – Marital Debt Tied to Separate Assets
When a separate asset is more or less left alone during the marriage, it’s not hard to determine who gets it in divorce. But if one spouse incurs debt related to the other spouse’s separate assets, or both do, the division may be more complex. One spouse may claim, for instance, that they incurred significant debt to repair a house that the other spouse owned before marriage. However, the other spouse could argue that they too acquired debt for the repairs. Determining the role that marital debt plays in maintaining or enhancing separate assets can be complicated.
How Courts Approach Disputed Assets
Courts have a number of different ways to settle disputes over property division. For instance, they could turn to expert witnesses such as forensic accountants who can help with tracing separate assets. Other experts, like tax professionals, can discuss the tax implications of certain property divisions. Business valuation experts can explain the spouses’ respective roles in enhancing the value of a family business.
In other situations, the courts must consider evidence related to the property division factors listed above. For example, a spouse who is in poor health may need to prove their condition so they can show a disadvantageous economic situation relative to the other spouse. In other cases, spouses can demonstrate the extent to which they sacrificed their own career to be a homemaker or stay-at-home parent, which enabled the other spouse to develop their career. Ultimately, the court is going to consider clear, objective evidence in determining how each factor should affect the property division. Through this, the judge will work for the most equitable distribution of property.
