How Do Courts Divide Property?

The answer is, “it depends.” Many states are equitable distribution states, which means marital property is to be divided equitably. Equitable does not necessarily mean fifty-fifty, although it does often work out that way. In community property states, marital property, called the property of the community, is always divided equally. Some states still retain the concept of fault in their divorce laws, meaning that one person has committed some bad act during the marriage that has caused the divorce. Therefore, if one party in the marriage has behaved badly, he can be punished by getting less of the marital property. It's important to know your state's laws before you begin a divorce.

Create an Inventory

To divide your property, you first need to know how much you've got. Get an inventory form from your lawyer or use the Asset Summary Sheet in Appendix B, and make a list of all your property. If household goods and furniture are an issue for you, make a separate, detailed list of this property. If you're still living in the house, go to each room and itemize the things in it. If you can, photograph or make a video recording of the contents of your home just in case things start to disappear during the process.

If you're not living in the house any more and don't have your possessions committed to memory, you may need to get permission from your spouse to walk through to write your list. If you own antiques, paintings, sculpture, china, sterling silver, crystal, electronics, jewelry, coins, or other collections or items of significant value, you may need to have them appraised. In most communities, experts who mostly handle estate sales can value these items.

The furniture in your home is considered used furniture and is now worth much less than when it was new, even if you paid a lot for it. Now your furniture's value is in its usefulness. Ask for those items that will minimally furnish your new place. Let the rest go.

It's very helpful if you and your spouse can agree on a date of valuation. If all property is valued as of about the same time, you will be comparing apples with apples. If you can't agree, and your lawyers can't agree for you, the court will choose the date of valuation. This date is usually the date the divorce was commenced or the date of the pretrial hearing or the trial itself. If you've been in the divorce process for some time, the values you have may be old, so they will need to be updated to the date the judge selects. Rather than have a whole new appraisal conducted, sometimes the court will allow you to get an update from your original appraiser. This may save you some money, but if you have a lot of property, this can become an expensive process.

Asset Summary

Take a look at the following asset summary and you'll see a list of items showing your values and your spouse's. Our example puts both your and your spouse's values all on one document to make it easier to understand, but they would be two separate documents in real life. This asset summary is meant to give you an idea of what should be included and what you need to know about each item. For more detail, refer to the Asset Summary Sheet in Appendix B.

Asset Summary

What does this all mean? If the parties are pretty far apart on values they've given to a number of items, it's a good bet the items on which they've placed a lower value are the items they want. For instance, if the wife wants to keep the house, she'll want it to go into the overall property division at a lower value, so she gets more of the other property.


The parties often learn new information by looking at the asset summaries their spouses prepare. For example, you may learn for the first time that taxes on your lake cabin haven't been paid for the last two years. You thought that your spouse had taken care of this. Or maybe this is the first time you've heard your spouse is claiming a nonmarital interest in the house. And where did this “loan to parents” come from? That was a gift, you thought. And can you believe it? He went out and bought a motorcycle.

Sweat Equity

The person who put in a lot of work on real estate that you own together may claim the property is worth more because of this work. This is probably true, but depending on the jurisdiction, the court may or may not credit a spouse who put out this effort. Sometimes a spouse will use this argument to try to create an interest in the other party's nonmarital property, which can work in some cases. Another way the sweat-equity argument arises is when one of the parties has refinished antiques and wants credit for making them more valuable. Courts are not easily persuaded by the sweat equity argument, so if you plan on making it, try to find documentation like pictures or before-and-after appraisals to support your arguments

Bring in the Experts

The parties who filled out the asset summary did not have their major assets valued by an expert. Instead, they assigned values based on guesses or what someone told them. Maybe they went to a marine store and priced new boats, or to the local gift shop and priced silver. Perhaps their Realtor buddy gave them a ballpark number for houses in their area. If values given to the items on the list are all roughly equal, then it probably won't be necessary to involve an expert. However, if the values placed on certain items are vastly different, these items should be valued by a neutral third person or, if you litigate, by two not-so-neutral experts.

Even if you are able to agree on a value of a property without professional input, be careful that you are not selling yourself short. Markets can change rapidly, affecting the value of property in big ways. If you have a valuable asset, you might want to consider hiring an expert just to make sure you know its actual value before you bargain it away.

Words about Debt

The date of valuing assets may not work as the date for establishing debt. You may have frozen your joint credit cards shortly after you decided to divorce and can use balances as of the date both of you stopped using the marital credit cards. Or, you may have both been charging up a storm since you separated and the cards are now maxed out.

You will need to take a close look at what each spouse has charged to determine if it should be a shared debt or an individual one. If you used credit during the separation because your spouse wasn't providing financial support, the reasonable debt accumulated for living expenses may be your spouse's responsibility. On the other hand, if you used your card to finance a solo trip to Vegas, that debt is yours and yours alone. Determination of the marital debt will need to be based on your particular circumstances. Just make sure you're informed about what exactly has been charged on the marital credit cards before you agree to pay.

You may be overwhelmed by the amount of debt you are left with following the divorce. Before you turn to bankruptcy, consider consumer credit counseling services or debt consolidation companies to help you get out from under the weight of money owed.

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