Frequently Asked Questions About Property Division

Q: What is marital property?

A: For purposes of distribution of property in a dissolution action, all property acquired by either spouse after the marriage and before a judgment of dissolution of marriage or declaration of invalidity of marriage, except by gift or inheritance, including nonmarital property transferred into some form of co-ownership between the spouses, is presumed to be marital estate or marital property. The name in which property is held is not terribly important. Regardless of whether title is held individually or by the spouses in some form of co-ownership such as joint tenancy, tenancy in common, tenancy by the entirety, or community property, if the property was acquired during the marriage (except by gift or inheritance) it is marital property, and both spouses have an interest in it.

Q: What is considered nonmarital property?

A: A party's nonmarital estate (or nonmarital property) is:

  1. Property acquired by gift, legacy or descent;
  2. Property acquired in exchange for property acquired before the marriage or in exchange for property acquired by gift, legacy or descent;
  3. Property acquired by a spouse after a judgment of legal separation;
  4. Property excluded by valid agreement of the parties;
  5. Any judgment or property obtained by judgment awarded to a spouse from the other spouse;
  6. Property acquired before the marriage;
  7. The increase in value of property acquired by a method listed in paragraphs (1) through (6), irrespective of whether the increase results from a contribution of marital property, nonmarital property, the personal effort of a spouse, or otherwise, subject to the right of reimbursement; and
  8. Income from property acquired by a method listed in paragraphs (1) through (7) if the income is not attributable to the personal effort of a spouse.

Q: What is dissipation of assets?

A: Once the marriage undergoes a breakdown, a spouse who gives property away (even to a child or parent), uses property for a purpose unrelated to the marriage, or for an improper purpose, is said to have dissipated the estate. A party who dissipates will be called to account for the property when the marital estate is divided.

Q: How are property and debt distributed between the parties in a divorce case?

A: Each party is generally assigned his or her nonmarital property. The marital estate and marital obligations (debt incurred during the marriage, except for dissipation purposes) is to be equitably distributed between the parties, without regard to marital misconduct, considering the following factors:

  1. The contribution of each party to the acquisition, preservation, or increase or decrease in value of the marital or nonmarital property, including the contribution of a spouse as a homemaker or to the family unit
  2. The dissipation by each party of the marital or nonmarital property
  3. The value of the property assigned to each spouse
  4. The duration of the marriage
  5. The relevant economic circumstances of each spouse when the division of property is to become effective, including the desirability of awarding the family home, or the right to live therein for reasonable periods, to the spouse having custody of the children
  6. Any obligations and rights arising from a prior marriage of either party
  7. Any antenuptial agreement of the parties
  8. The age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities, and needs of each of the parties
  9. The custodial provisions for any children
  10. Whether the apportionment is in lieu of or in addition to maintenance
  11. The reasonable opportunity of each spouse for future acquisition of capital assets and income; and
  12. The tax consequences of the property division upon the respective economic circumstances of the parties.

Q: If the spouses have not kept their nonmarital property separate, but they have combined their ownership in joint tenancies and otherwise, how does the court decide on property division?

A: Nonmarital property that is placed into some form of joint ownership is "commingled property." Unless otherwise agreed by the spouses, commingled property is treated as follows: (1) When marital and nonmarital property are commingled by a spouse contributing nonmarital property to the marital estate, or by the parties contributing marital property to a spouse's nonmarital estate, resulting in a loss of identity of the contributed property, the contributed property is transmuted to the estate receiving the contribution. Example: The wife contributes inherited (nonmarital) funds to the purchase of house, which is held in joint tenancy by both parties. The wife's nonmarital funds are transmuted to marital funds. However, (2) When one estate of property makes a contribution to another estate of property, or when a spouse contributes personal effort to nonmarital property, the contributing estate shall be reimbursed from the estate receiving the contribution notwithstanding any transmutation. Reimbursement can only occur with respect to a contribution, which is retractable by clear and convincing evidence, or was a gift, or, in the case of a contribution of personal effort of a spouse to nonmarital property, unless the effort is significant and results in substantial appreciation of the nonmarital property. Personal effort of a spouse is considered to be a contribution by the marital estate. The court may provide for reimbursement out of the marital property to be divided or by imposing a lien against the nonmarital property which received the contribution.