Three Steps To Complex Property Division

Divorce may not always involve tough decisions about parental rights, but it always involves decisions about money. When a couple files for divorce, they will have to divide their assets and liabilities. Property agreements are very difficult to modify, which is why it is crucial that you have an attorney help guide you — even if you and your spouse can agree.

At Joseph Allan Shaw, P.C., we handle cases throughout Baldwin County involving complex property division. This could include items such as the marital home, real estate, investments, retirement accounts or pensions, and business interests.

The process of determining “who gets what” involves three essential steps:

• Step 1: Determine whether property is separate or marital. Under Alabama law, any assets or liabilities acquired during the marriage are considered marital property and subject to equitable division. “Equitable” refers to a fair division based on the circumstances. It can result in an equal division but that outcome is not guaranteed. Property can be entirely marital, entirely separate or both, in which case your attorney will have to determine the martial interest.
• Step 2: Determine the value of the property. Cash in a bank account is easy to value, but the same cannot be said of other property. For instance, valuing real estate involves determining both equity and subjective market value. Two retirement accounts may have the same balance of $100,000 but not equal values due to different tax consequences.
• Step 3: Determine which spouse will have ownership of the property. When you divide property, each party is entitled to an equitable share of the value of the property. For example, you are not required to withdraw funds from a retirement account; you can choose to compensate your spouse for their share of the value with another asset. In other cases, like when dividing the marital home, neither spouse may actually take possession of the property. You may choose to sell the property and split the profit.

Although we have narrowed the process down to three steps, each step can be complicated by myriad factors beyond the examples given above. If you are considering divorce, we encourage you to call 251-964-7774 or email us to schedule a comprehensive consultation with our lawyer.