Factors Considered in the Distribution of Marital Assets
Many states in the U.S. are community property states, where the property of the marriage is presumed to be divided in half with each party receiving 50% of the marital property. Once you are married in these states, in general it means that your spouse owns everything you own, and so in a divorce they would have a right to equal distribution. Alabama is not one of these states and in such decisions concerning marital property the Court will apply something called the equitable distribution of property. Therefore, in Alabama the division of property will be either by agreement (in an uncontested divorce) or a judge will apply certain subjective factors and make an equitable distribution of the property for you.
Some of the many factors that a judge may consider in determining who gets what marital property in a divorce are the age and health of the spouses, considerations of the children (who is paying child support and who is the custodial parent can make a difference since the custodial parent might be granted the marital home so that the child can continue living in this home to provide stability), length of the marriage, economic fault (meaning who may have caused the property to lose value in some way), homemaker value (meaning staying at home allowed other party to work and earn money so being homemaker is given some value as a percentage of the property), abuse or infidelity or the parties, whether alimony is being paid in the divorce, economic earning power, and other such considerations.
All of these types of things would be presented at a hearing and the judge would make a decision for the spouses concerning how to divide the marital property that is in dispute. The judge has a great deal of discretion and can use any number of factors in making this decision which makes it highly difficult to predict what a judge may potentially do in your particular divorce if you were to have a trial and let the judge decide your division of marital property. Divorce courts typically consider the financial state that both spouses will find themselves in after the divorce in considering what an equitable distribution of the property would be.
One common example of marital property that must be divided in a divorce is when there is a marital home that has a substantial amount of equity in it and the couple has been married for a long time. For example, a couple has been married for ten years and the home has $60,000 of equity in it. Equity is the amount left after subtracting the mortgage or any other liens owed on the home from the sale of the house or what the potential sale of the house would bring which is determined by such things as appraisals. Once this equity is determined, the spouses would need to determine who gets how much of it and how to make this division.
Usually, the parties transfer all rights in the property to the person that is going to remain in the house and will keep paying the mortgage. One party transfers all rights in the house to the other in exchange for their percentage or share of the equity in the house. If there is $60,000 of equity in the house then one spouse may transfer her rights by a quit claim deed to the other spouse in exchange for $30,000 one-time payment.
Once this is done, that spouse is no longer on the deed and has no ownership in the home and the other spouse owns the property outright going forward. Dealing with the mortgage and debt issues on the house (if both of you are on the mortgage) can be a difficult issue because the mortgage company does not have to take either of you off the loan but they will sometimes do so through the process of refinancing. It is almost always recommended that you speak with a local divorce attorney where you live. We have multiple offices and can file your divorce in Tuscaloosa, Auburn, Madison, Jasper, Birmingham, Alabaster, Anniston, Prattville, Montgomery, Huntsville, Decatur, Athens, Selma, Oxford, Hoover, Cullman, Albertville, Bessemer, Pelham, Dothan, Enterprise, Gadsden, Talladega, or anywhere else in the State of Alabama.
Attorney Steven A. Harris regularly blogs in the areas of family law, bankruptcy, probate, and real estate closings on this website. Mr. Harris tries to provide informative information to the public in easily digestible formats. Hopefully you enjoyed this article and feel free to supply feedback. We appreciate our readers & love to hear from you!