When a marriage falls apart, the marital property needs to be split in two. Usually, the ex-spouses going their separate ways try to leave nothing behind. They tend to fight for their assets — sometimes, even for the ones they have less right to. So, how do people going through a divorce trial protect themselves financially?
The matters are somewhat clearer for couples with a prenuptial or postnuptial agreement. But what is the best way to split assets for former spouses lacking this document? Read on to learn how to stay safe in a divorce trial in Pennsylvania and defend all valuable assets.
On a related note, find out if assets are always split 50/50 in a divorce.
How to Ensure Financial Protection in a Divorce
1. Determine the Relevant Property
Any divorcing spouses should first identify what they own — both together (as a married couple) and separately. Thus, each spouse will have to make their own list of assets. This way, it will be easier for both partners to split their property fairly.
Property refers to all those assets owned by the divorcing couple that have any monetary value. Still, the difference between monetary and non-monetary property seems crucial in a divorce. Thus, the former refers to the assets belonging to both spouses that were obtained during their marriage. In PA, the court splits marital property between the spouses following equitable distribution.
2. Confirm the Separation Date
One of the most important things to consider in a divorce is the date of a couple's separation. The reason is that this date determines what counts as marital property. For example, a person might purchase a car or real estate upon separation. In that case, such an asset becomes this person's non-marital property — the possessions not subject to division.
When the couple starts living separate and apart in Pennsylvania, this counts as their separation date. Typically, this means the spouses are no longer sexually involved with each other. Still, they do not necessarily have to live in separate households. As soon as they stop presenting themselves to the world as a couple, they count as separated.
3. Classify the Assets
Once the couple has confirmed their separation date, it becomes easier to classify their possessions. Thus, anything they acquired during marriage falls under marital property assets. In other words, those are all possessions the spouses purchased between their wedding day and the date of their separation. So, it is irrelevant whose name a particular asset bears if obtained during the marriage.
On the other hand, each spouse also owns non-marital property. Among other things, these are the assets they obtained before marriage. Also, gifts from one spouse to the other will count as the latter's non-marital property. The same goes for inheritances and the assets excluded from the marital estate with a prenuptial agreement.
Yet, separately owned assets can create additional problems. In general, this refers to those possessions whose value increases over time — like bank accounts. Thus, separate retirement accounts opened before marriage fall under the couple's non-marital property. Nonetheless, a monetary increase in their retirement plans will still be subject to division.
4. Determine the Value of the Assets
After classifying their property in one of the two above categories, the couple needs to determine what their assets are worth. While it may be easy to learn the current value of a bank account, other possessions might create problems. For example, expensive belongings like houses and artwork may require an expert's opinion.
In addition, the value of the spouses' non-monetary property can also play a role in property distribution. Although the court will not divide these assets between the spouses, it will consider their value. For instance, a spouse who has come into a lot of inheritance money might seem more financially stable. Since the court practices equitable distribution, it may thus rule in favor of the other spouse.
Final Remarks
Any couple getting a divorce in PA needs to know how to protect their assets in court. Each spouse will thus need to identify and make a list of their possessions. After that, they should classify their assets as either marital or non-marital property. The final step should be determining the current value of each asset individually.
To make sure they leave nothing behind, the spouses might use the help of experienced divorce attorneys from good divorce law firms in York PA. They can help with divorce-related concerns, such as if one's wife can take their 401k in a divorce. As a result, all their assets and finances will be safe in case of a grueling divorce.