The Transfer of Property in a Divorce
Community Property or Equitable Distribution Jurisdiction
- There are eleven community property jurisdictions in the United States: Alaska, Idaho, Puerto Rico, Wisconsin, Texas, Washington, Arizona, California, New Mexico, Nevada and Louisiana. These eleven jurisdictions consider all property acquired during marriage as belonging to both spouses equally. In community property states, separate property --- property owned by one spouse before marriage, inheritances or gifts from one spouse to another --- is not divided equally upon dissolution. In equitable distribution jurisdictions, courts consider many factors when dividing property upon divorce. One spouse may be entitled to a larger share if a court finds unequal contribution or if the unequal division of marital assets is just and proper.
The Marital Home
- Often, the marital home is a couple's largest asset. Where a married couple has children and one spouse is considered the primary caregiver, a court may grant the marital residence to that spouse. A common way in which a marital residence is transferred is by quitclaim deed. One spouse may issue a quitclaim deed to the other spouse, thereby transferring her ownership rights in the property. If there is a large amount of equity in the marital home, a couple may elect to sell it and split the proceeds. The division of proceeds, however, may be ordered in an unequal split, depending on the jurisdiction.
- In community property jurisdictions, all retirement funds acquired through income earned during marriage belongs to both spouses equally. Typically, courts allow couples to decide how to transfer retirement funds. One way is to cash out the retirement fund upon divorce. Couples can also elect to have the retirement fund valued at the time of divorce and make it half transferable to the non-owner spouse upon the owner-spouse's retirement.
- Married couples may own additional assets that must be divided during a divorce settlement. Other types of assets may include a business owned and operated during the course of marriage, vacation property and bank accounts. Shares of these types of marital assets are divided either equally or in a manner a court deems just. Often, bank accounts are easily divided. However, where a couple owns a business and one spouse is more involved in the day-to-day operation of the business, a forensic accountant may need to examine the business's records to determine its value.