How Is Property Divided in a Divorce?

Dividing what you own is often the part couples worry about most. The good news: if you can agree between yourselves, the court will almost always honor your agreement. Understanding a few basics makes that conversation much easier.

Marital vs. separate property

Generally, anything you acquired during the marriage is marital property and gets divided. Things you owned before marriage, or received individually as a gift or inheritance, are usually separate property and stay with you. The line can blur when separate assets get mixed together, but the basic idea holds.

Two systems: community property and equitable distribution

A handful of states are 'community property' states, where marital assets and debts are generally split 50/50. Most states use 'equitable distribution,' which means a fair split, not always an equal one. Fair takes into account things like each spouse's income and contributions.

Don't forget the debts

Dividing a divorce isn't only about assets. Mortgages, car loans, and credit-card balances have to be assigned too. Spelling out who is responsible for which debt protects both of you later, especially with joint accounts.

Writing it down

Your decisions go into a marital settlement agreement that becomes part of the court's final order. The clearer and more specific it is, accounts, vehicles, who keeps the house, the fewer disputes you'll have down the road.

Most couples find that once they list everything out, the split is more obvious than they feared. Agreeing between yourselves keeps thousands of dollars out of a lawyer's pocket and in yours.