Dividing Assets in a Utah Divorce After deciding to get a divorce one of the major issues couples often run into is determining how assets should be divided. There are a number of factors that go into determining each party's interest in marital assets. "Equitable Distribution" is the term the courts use when dividing property. The term speaks for itself, but suffice it to say that the goal of the court is to make sure that the division of assets is fair, but not necessarily equal. The first step in determining how or if an asset should be divided is determining whether an assets is marital property, separate property, or a combination of both.
Separate Property vs. Marital Property
Marital Property in Utah Divorce Marital property is generally property that both parties are entitled to, while separate property is property that belongs to one spouse or the other exclusively.
Separate Property: The most common type of separate property is property that was acquired or accumulated before the marriage. So if you have a 1966 Plymouth Fury that was paid for before the nuptials, then that beast will remain exclusively yours after the divorce. Separate property is also defined as inheritances, income from separate property, gifts to only one spouse, and personal injury compensation.
Separate Property: The most common type of separate property is property that was acquired or accumulated before the marriage. So if you have a 1966 Plymouth Fury that was paid for before the nuptials, then that beast will remain exclusively yours after the divorce. Separate property is also defined as inheritances, income from separate property, gifts to only one spouse, and personal injury compensation.
Marital Property: Marital property, on the other hand, is property that was acquired or accumulated during the marriage. Even if the property is only in one spouse's name, it is generally still deemed marital property by Utah courts. If the property falls in one of the exceptions listed above, then it would be deemed separate property rather than marital. Intangible assets can be considered marital property as well, such as a degree, license to practice a profession, or even a career path.
Combination: Sometimes, an asset can be considered part marital property and part separate property. For instance, if a party buys a motorcycle and pays for half of it before getting married, but then pays for the other half after his/her vows, then his/her spouse would only be entitled to a portion of the value accrued during the marriage.
Another important factor in determining whether an assets is marital property or separate property is figuring out how that asset was treated during the marriage. If separate property is co-mingled with marital property, then it loses its separate property status. Or if separate property increases in value as a result of a spouse's contribution, then that increase is usually designated as marital property. This means, if a party purchases a house before the marriage, and the house increased in value solely because of the market, it would likely still be designated as separate property in the divorce. However, if the parties used money earned during the marriage to pay the mortgage, or improvements were made during the marriage, then any appreciation would be considered marital property.
Combination: Sometimes, an asset can be considered part marital property and part separate property. For instance, if a party buys a motorcycle and pays for half of it before getting married, but then pays for the other half after his/her vows, then his/her spouse would only be entitled to a portion of the value accrued during the marriage.
Another important factor in determining whether an assets is marital property or separate property is figuring out how that asset was treated during the marriage. If separate property is co-mingled with marital property, then it loses its separate property status. Or if separate property increases in value as a result of a spouse's contribution, then that increase is usually designated as marital property. This means, if a party purchases a house before the marriage, and the house increased in value solely because of the market, it would likely still be designated as separate property in the divorce. However, if the parties used money earned during the marriage to pay the mortgage, or improvements were made during the marriage, then any appreciation would be considered marital property.
Dividing a Pension and/or other Retirement Benefits
A pension or other retirement benefits are divided in the same manner as other assets. Retirement earned before a marriage is considered separate property, and retirement earned during a marriage is considered marital property. Utah uses the Woodward Formula when determining what interest one spouse has in another's retirement benefits. In Utah a party needs a Qualified Domestic Relations Order before an administrator will divide a retirement account or pension. You can learn more about QDRO's and the Woodward Formula here.
Other Marital Assets
Basically all marital assets must go through the same process before they can be correctly divided. Is the asset separate property or marital property? If marital property how much is it worth? What is a fair division? Some property, such as real estate or a business, should be appraised by a professional in order to determine how it should be valued. Dividing and valuing a business can be especially difficult. You can learn more about this process in my blog, "Valuing and Dividing a Business in a Divorce."
Division of assets does not have to be complicated. Hiring a divorce attorney that has experience in complex property division will go a long way in ensuring that you're rights are preserved and you get what you're entitled to. Call Pearson Law Firm for a free consultation with an experienced Utah divorce attorney that can help you navigate this complicated landscape. Call today, 801-888-0991.
Division of assets does not have to be complicated. Hiring a divorce attorney that has experience in complex property division will go a long way in ensuring that you're rights are preserved and you get what you're entitled to. Call Pearson Law Firm for a free consultation with an experienced Utah divorce attorney that can help you navigate this complicated landscape. Call today, 801-888-0991.
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