When couples consider a divorce, there can be issues that arise that must be solved. By breaking up the marriage, they will also have to consider how this can affect them and their ownership of their assets. They may lose the rights to some of their assets or property. Divorce proceedings include the division of marital assets. Assets are categorized as marital property or separate property. This means that it was either acquired in marriage or was owned previously by one individual spouse before the marriage was official. Equitable distribution is the method that judges use to divide marital assets in divorce.
Through equitable distribution, assets will be divided fairly and justly by a court. It does not mean that the assets will be divided equally though. Judges will take many factors into consideration to make their decision. This means that the assets of a divorced couple should be split in a fair and just manner under the court’s discretion. The court will decide what they believe to be the best outcome.
What factors are considered?
When deciding how to split assets, the court will consider many factors of the marriage. These factors can include the duration of the marriage, the standard of living, the value of the marital assets, the health and age of both parties and the earning capacity and income of the couple. The allocation of assets can be impacted by the contribution of each party, tax consequences and an individual’s financial situation.
How is a prenuptial agreement involved in this process?
If a prenuptial agreement was signed by the spouses, some of their assets may not be involved in the distribution process. In a prenuptial agreement, spouses have laid out assets and properties that are owned by each individual instead of being considered as marital property. This is a legally binding document that may prevent these assets from being considered during equitable distribution. A postnuptial agreement can have the same effect. It may be able to protect certain assets from being distributed by granting one spouse ownership. This can help spouses retain control of assets that they wished to keep in the family. It can also prevent a business from being involved in divorce proceedings if it was claimed by a spouse in the written document.
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