The identification of assets and liabilities, valuation of property and the assignment of liabilities are extremely important components of any divorce. Property may be determined to be marital or separate. While marital property is equitably divided (although not necessarily equally divided), separate property is generally awarded to the party who owns it. Separate property tracing can be complex and may require the services of a forensic accountant.
The parties to a divorce may ultimately be able to come to an agreement on the division of marital assets that will be incorporated into a court’s final judgment. However, if parties cannot agree, the court will make a determination during a trial of the case.
If there is no prenuptial agreement, the court will first categorize assets and debt that are deemed to be marital. It then assigns monetary values to the assets and debts in order to make an equitable distribution between the parties. In making the equitable distribution, the court considers multiple statutory factors along with any other factor that the court finds to be expressly relevant.
Fault is generally not considered in division of property. The court will normally focus on a 50/50 equitable division of assets. However, there are exceptions, such as if one spouse has committed financial misconduct. In such a case, a court might not divide assets equally. Financial misconduct might be seen when one of the parties loses significant marital funds gambling, buying drugs, or spends sums on a paramour. The aggrieved spouse might then be awarded half of the sum that the other spouse is found to have misused.