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Divorce is messy in every respect. You have feelings you have to deal with, whether they be heartbreak, anger, sadness, or frustration. With kids involved, you have all of their feelings that come into play as well, complicating your own feelings. Then, of course, there is the stuff. Yes, the assets (and debt) that you compiled together during marriage now somehow have to be split appropriately.
Community property and equitable distribution

State laws say that divorce assets will be distributed based on community property laws or equitable distribution laws. There are nine community property states, each with the position that all assets and debts acquired during the marriage will be split 50-50. In a community property state, only assets and debts acquired before marriage, after separation or divorce, or inherited or gifted are considered separate property.
Equitable distribution takes the position that all assets and debts acquired during the marriage will be distributed equitably (fairly) not equally. “A court may award each spouse a percentage of the total value of the property. In that event, each spouse will get personal property, assets, and debts whose worth adds up to an assigned percentage,” attorney Richard Stim wrote for Divorcenet.
Division of assets in divorce

One of the hardest parts about divorce is that neither party ends up with more assets than they had while married. Essentially, a financially sound couple move on with a fraction of what they had together when they split up. Assets can be divided up amicably without a judge getting involved or they can be contested, requiring a judge to make a final decision on the matter.
The first step in splitting assets is to properly inventory assets. Both parties are asked to complete an asset and debt sheet. If one of the parties tries to hide assets, a judge could award the other party with 100% of the assets to the spouse being deceived, order them to pay the other's attorney fees and/or fines, dismiss all claims or — in some serious cases — the offending party could even face jail time.
Once all assets are listed, each party will determine which are marital assets and which are separate assets. This is important because while separate assets are not part of the marriage, a judge could order separate assets to be used in an equitable distribution. Even assets such as a 401k are considered a marital asset and subject to splitting in a divorce.
Marital assets, regardless of how they are titled, can include:
- Real estate
- Savings accounts
- Stock and investment portfolios
- Retirement assets
- Country club memberships
- Life insurance
- Business ownership
The courts will, of course, be pleased if both parties agree to how the assets should be split. However, if there is a dispute over it, the judge will review all assets and the reasoning from each side, and then make a determination on how to split the marital estate.
How is marital debt divided

Assets are not the only things couples can acquire during the marriage; debt is another thing that needs to be addressed during a divorce. Debts that must be addressed include:
- Credit card debt
- Mortgages
- Student loans
- Auto loans
- Medical debt
- Tax liabilities
Colorado mom Pam Archer found out about her shared debt only during the divorce. “I had no idea how far in debt we were until I saw the divorce papers and financial documents," she told Mom.com. "I was devastated at the thought that I was responsible for his thousands in credit card debt.”
Debts are handled on a case-by-case basis and vary among states. When it comes to a mortgage, if the house isn’t being sold, chances are that the debt will need to be refinanced under the sole name of the person taking it over. There are cases where one spouse is ordered to keep paying on the house their ex lives in.
Auto loans follow much of the same philosophy: Usually the person taking the vehicle will take over the payments. If they can’t, they often sell or trade in the car for something more manageable. Credit cards and medical debt are treated as joint in community property states; equitable distribution states look at when the debt was acquired as well as the fair disposition of it based on the entire financial case.
Only student loans acquired during the marriage (either spouse or your kids’ loans) are equally split unless otherwise agreed upon. When it comes to taxes, unless you filed separately, chances are you are equally responsible to the IRS. If you feel your spouse did something without your permission or understanding, you can file Form 8857, Request for Innocent Spouse Relief, to see if the IRS will absolve you from any liability on the tax burden.
Remember that if your ex files for bankruptcy, you are still responsible for any debt attributed as shared. Unless you file for bankruptcy, your ex’s creditors can come after you for the money.
To hear experienced insight from divorce attorney Jonna Spilbor on splitting your assets during divorce, check out these episodes of Divorce Tips: