You should begin taking inventory of your assets and debt as soon as you decide to divorce. This is because splitting up assets and debt can be a difficult aspect of the divorce process. However, it does not have to be. If you can maintain open communication with your spouse, this process can be painless. Even if you and your spouse cannot divide your assets amongst yourselves, if you are informed about the process, it will make it much easier. To this end, let’s take a look at how certain assets and debt are divided in Connecticut in divorce.
Property Division Outside of Court
The easiest way to divide assets in a divorce is by deciding how to split up property with your spouse. If possible, do this without going to court. Both spouses should make a list of the property that they wish to keep once the divorce is settled. If communication is possible, the spouses should discuss what they would like to keep and what they could give up. The process will run smoothly if both parties are willing to compromise.
Going to Court
However, if this is not possible, you can go to court. There, a judge will decide who keeps what using state law rules in order to divide the property. This is an expensive and time-consuming way of solving the problem, and one that it is best to avoid. If you do choose to go to court and have the legal system divide your property, they will do so on the basis of equitable distribution, which means that the assets will be divided fairly but not necessarily equally since both spouses may not have the same financial standing.
Types of Property
Marital property is the only form of property that should be considered for equitable distribution. This includes all assets, earnings, and debts accumulated during the marriage. Marital property ranges from a tangible property (home, vehicles, household items etc.) to intangible (life insurance, retirement plans, etc.).
Separate property of one spouse includes all personal property obtained before the marriage took place. It also includes inheritance or gifts given to one spouse. A business begun before the marriage will be considered separate property. However, it may be considered communal property if it increased dramatically during the marriage. This could also happen if both of the spouses worked in the business. If the property was purchased with a combination of marital and separate funds, it generally becomes communal property.
What is considered marital property will vary from state to state. It may be helpful to familiarize yourself with your state’s laws. Then, you and your attorney can strategize and decide what you would like to keep. When dealing with large assets, it is important to seek expert advice. Do this to understand exactly what you are dealing with. You should seek the help of an accountant or an attorney so that you can get a true estimate of what your property is worth. Also, you can understand what you could be giving up, and what you are entitled to. You should have the value of all you and your spouse’s combined property assessed. This will help you prepare for asset division. Furthermore, it is your responsibility to prove what assets exist, not the judge’s.
Dividing assets during a divorce can turn into a chaotic mess if you do not stay organized and informed. Try to make sure that you understand the value of all your shared property. Then, decide what you want to keep and what you are willing to give up. Also, try to keep the lines of communication open between you and your spouse.
You and your spouse will share the responsibility for any debts accumulated over the course of your marriage. Anything that you and your spouse have signed together, such as joint loans or joint tax returns will be divided between you. However, any debts that belong to one spouse before the marriage took place will not be considered joint debt. Some of the biggest debts that you and your spouse have accumulated, such as credit card debts and mortgages, may give you cause to worry.
However, divorce and debt laws vary from state to state, and many judges will try to be as accommodating as possible. Depending upon the state that you live in, communal debts are not necessarily divided equally. In a few states that have adopted community property laws, all assets and debts accumulated during the marriage are split 50-50, regardless of social or financial standings. However, these laws are not applicable in Connecticut. In the Connecticut court system, judges consider who is in a better position to pay the debt and as a result, one spouse may be paying more money than another.
If one spouse cannot pay a debt that they were assigned in the divorce, you are legally obligated to pay the debt. Regardless, both spouses will be paying something, and it is important to keep track of the money that you pay towards joint debts. As soon as you know that your marriage is ending, you should cancel any joint credit cards that you have with your spouse so that the balance does not increase. Build individual credit by obtaining credit cards apart from your spouse.
In some cases, the credit that you accumulated during your marriage may not apply to your individual credit because a creditor is not bound to create individual accounts from the joint accounts. As a result, you may need to reapply for credit individually and can deny or extend your credit on that individual basis. This can be helpful or hurtful, but it is important to keep it in mind.
Sometimes one spouse decides that they want to hide some of their assets. This is done either in order to benefit financially from the divorce or just so that their spouse doesn’t get as much money as they are supposed to. Hiding assets is not recommended and is considered to be a crime. If caught, you may be held in contempt of court and may even face criminal charges.
The first step in dividing assets is to gather all of the assets owned by each spouse together. These can be in the form of tangible and intangible assets. Tangible assets include cash, cars, and jewelry whereas intangible assets are things such as bank accounts, stocks, patents, etc.
If you think something is not accounted for or that your spouse may be hiding something, it is best to get your attorney involved. An attorney can do many different things in order to find any hidden assets. They may demand documents and inspection of things like a safety deposit box. They can also help you examine income tax returns and bill statements. If none of those things turn up any hidden assets, your attorney may request you and your spouse appear before a court, where your spouse is sworn to tell the truth and is forced to answer any questions asked by the attorney.
What to Do
If your spouse is found hiding some of their assets, they may face various consequences. They may be convicted of fraud, charged with testifying falsely under oath and even be held in contempt of court. If caught, they may also have to pay legal or private investigator fees of the opposing party. Your spouse may be awarded more marital assets as you as well. These consequences can happen to anyone, even you. It can basically cost you a lot of money in the long run if you are caught hiding any assets.
Even if one was to get away with hiding assets, it could come back up in the future. If proof surfaces at a later date that assets were hidden, your ex-spouse may reopen your divorce settlement. You may then face civil charges and your ex may be awarded money or assets they hadn’t received before. Hiding of any sort of assets is not something to be taken lightly. If caught, you will be punished and your spouse will receive compensation.
A quitclaim deed releases the property from one person and gives full ownership to the other. In the case of divorce, a quitclaim deed will relieve one spouse of liability regarding ownership of the home and give it to the one still living in the home.
There are two people involved in this transaction, the grantee and the grantor. The grantee is the one receiving the deed and the grantor is the one releasing it.
A quitclaim deed is most commonly used in divorce cases. It is very rarely used to transfer property from seller to buyer during a normal, everyday property sale. This type of deed is a very simple, efficient, and inexpensive way to transfer ownership of your marital home when going through a divorce, although it is important to realize that a quitclaim deed is not the process of selling a property. No money is involved in this type of transaction. Another important factor in the quitclaim deed that you should know is that it does not affect the mortgage. If both spouses’ names are on the loan then they are both still responsible for that loan even after a quitclaim deed is filed.
Taking one spouse’s name off of the loan is a totally different process – the quitclaims transaction only involves the property itself.
You may find a quitclaim deed online and it is a very simple and easy process to fill it out. Once you print the document, there are a few requirements to make the deed official. You can even just write the following information on a piece of paper. Then get it notarized and then the document will be official. You will need:
- The names of the grantor and grantee.
- A legal description of the property. (Note that this does not mean just the address).
- The actual price paid for the home.
- The name of the county that the property is located in.
- Signatures from both parties occurring in front of a notary public.
After the quitclaim deed is filled out properly, it must then be taken to the county records office in the county in which the property is located. There is a small fee to have the deed filed, but then the process is over with. For more information on quitclaim deeds, contact me here.
Dividing Retirement Funds
Determining what you have a right to in your divorce can be difficult. One of your major assets that you might be concerned about in divorce is your retirement fund. If you are confused about if and how your retirement fund will be divided, the law can clarify certain aspects of dividing this asset. By law, you are not allowed to divide your retirement assets without being penalized. The only time that you can divide your retirement fund is when you are going through a divorce. This doesn’t mean that you or your spouse can liquidate your assets without penalty, but it does allow you to divide your retirement funds if you want to.
In most cases, this is achieved when both parties file a Qualified Domestic Relations Order (QDRO). It is important to keep in mind that this area of the law can be tricky, and the ability to divide your retirement funds and this process will vary based on the company you work for and the parameters of your individual retirement plan. For this reason, every case of dividing retirement funds is different. You will get the best information for your situation by contacting a divorce lawyer.
QDROs can help you to plan for your future and can be extremely helpful for a spouse that does not have a job or who does not make a lot of money. In some cases, you may have to give a part of your pension plan to your spouse, in other cases, you might receive money from a pension plan that your spouse has. QDROs can help you claim your retirement plan and will give you and your spouse a fair portion of the fund.
Filing the QDRO
Filing a QDRO can be a difficult process because these forms need to be filled out in a precise manner. You will have to gather a lot of information about your retirement plan and your spouse’s in order to fill out this form. In addition, in order to qualify, you have to make sure that your retirement plan is covered by the Employee Retirement Income Security Act of 1974 (ERISA). If you have a good job and a good retirement plan, you could have a lot to lose if your spouse is seeking part of this plan. In certain situations, you may be able to offer, your spouse some other asset instead of rights to part of your retirement plan.
Filing a QDRO is a complex process that should be handled by attorneys. After all of the paperwork is filed, a plan administrator will review the QDRO to ensure that it is in compliance with regulations. At this point, the plan administrator will determine each party’s share in the fund. In determining each party’s share, the plan administrator will consider whether or not the spouse who has the retirement plan was enrolled in that retirement plan or pension before the marriage took place.
If the plan began before the marriage took place, the duration of the marriage, as well as the duration of the plan itself, will be taken into consideration when determining what belongs to whom. Because this is an intricate process, several months can pass from the date a divorce is entered to the final distribution of the retirement plan.
Dividing the House
There are a few common circumstances that you can find yourself in when splitting up your home. You might find yourself in a fairly straightforward situation when dividing your house in the divorce. If you purchased the home before your marriage it may be considered separate property. Then you will have a legal claim to the home or a large portion of the equity in the home. However, the other side could claim equity in the home. Likewise, if your spouse purchased the home prior to your marriage, it could be entirely his or her property in the divorce, but you can make claims to home equity, an increase in the value of the home over time, etc.
It becomes more complicated when determining who wants to keep the home and what name is on the mortgage documents. It is not easy to remove a name from a mortgage without a refinance, payoff, or sale. Even if someone’s name isn’t on the home and if it were purchased during the marriage, both have a claim to the home. The issue is how will someone’s name be removed from the mortgage or added onto the mortgage? You don’t want your spouse’s name on the mortgage or equity line of credit if you keep the home. You may have to refinance the home to remove the spouse’s name.