Division of Assets Attorney in Daphne, AL

When a marriage ends, something has to be done with the assets and property accumulated during the course of the marriage. This if often a source of significant dispute for divorcing couples, as both parties have their own ideas about what is fair. To ensure that you get what you deserve during the division of assets, it’s important to hire a skilled and knowledgeable attorney whose only priority is your best interests.

At Coumanis & York, we know that the division of assets plays a big role in how well you will be set up for life after divorce. We are here to help you fight for everything you deserve. Set up a consultation now by calling us at 251-990-3083.

Equitable Distribution in Alabama

Alabama, like many other states, follows the equitable distribution approach. Equitable distribution looks to distribute assets “fairly and equitably”—which isn’t necessarily the same as distributing assets 50/50.

By taking into consideration a number of factors and circumstances, courts can determine how to distribute assets equitably during a divorce. This method strives to give each party a fair shot at getting established after a divorce.

Factors Considered in Property Division

A number of factors play into the division of marital assets. This gives the court some discretion to accommodate each couple’s unique circumstances. Some of the factors that may play a determining role in asset division include:

• The financial contributions made by each individual
• The non-financial contributions made by each individual to the marriage
• How long the marriage lasted
• The role of fault in the marriage (if one party cheated, grossly abused the finances of the marriage, or abused the other spouse, for example)
• How childcare responsibilities will be split after divorce
• Each party’s earning capacity
• Each party’s separate assets that they can use in their post-divorce life

Marital Property and Separate Property

Remember, only marital property is subject to asset division. Separate property generally includes anything that either party brought into the marriage. For example, if one party had a sizable investment fund before the start of the marriage and didn’t use it to fund the marriage, that would likely be considered separate property and would not be divided.

There are exceptions to this. If a separate asset has been used to support both parties during the marriage, it might be considered marital property. For example, if one individual owned a business prior to the marriage but co-mingled the business funds during the marriage to pay household bills, the other spouse may be entitled to part of the business.

Anything acquired during the marriage is likely going to be considered marital property with a few exceptions. Assets in this category are subject to the terms of equitable distribution.

Assigning Value to Assets

One topic that can cause conflict during asset division is the valuation of assets. To divide assets in a fair way, both parties need to know the true value of their property. Parties may agree on the value of certain items to speed up the process. If there are disputes, the parties may turn to expert appraisers for times like artwork, antiques, furniture, or homes. When the value of a retirement fund or other financial account is in question, it’s common to bring in a financial expert.

Don’t Forget About Debt

Just like all assets must be accounted for in a divorce, so too must all of the debts. A variety of factors may influence the division of debts, including which parties benefited from the debt, which party has the property tied to the debt, and each party’s ability to repay the debt. How debt is divided can also affect how property is divided, so you’ll need to work with your attorney to figure out where you are willing to compromise.

Know Your Options

There are three main options available to you when you are getting divorced, and a family home is involved. First, you can sell the house and split the equity in a fair and equitable manner. This option is ideal if neither party wants the house. Second, one party can buy out the other party’s share in the home. Finally, the parties can decide to sell the house at a later date. Couples may choose to do this if they want to keep the children in the home and have the custodial parent remain in the home or sell when the market is better.

Transferring Your Interest and Your Obligations

If one party wants to keep the house, the other party will need to transfer their share of the home to the other. However, this does not affect the mortgage and other liens on the home. If both parties are on the mortgage and one party transfers their share of the home, they are still on the hook for the mortgage should the other person stop paying.

No matter how much you trust your ex-spouse to continue making payments, this is a precarious financial situation to be in. You need an option that will allow you to walk away from your share in the home and your obligations.

What About an Indemnification Clause?

You may wonder about an indemnification and hold harmless clause. Your divorce settlement may state that the party keeping the house indemnifies and holds the other party harmless from the financial obligations associated with the house. Note, though, that this is an agreement between you and the other party—not the lender. The mortgage lender does not have to abide by these terms and, should the other party stop paying, they will not abide by these terms. They will still come after both parties to recoup their losses.

Refinancing the Home

The solution to this problem is to refinance the home in the name of the person keeping the house. This allows the person not keeping the house to get their share of the home’s value, while also allowing the person who wants the house to get a mortgage in their name only. After that, it does not matter if your ex-partner stops paying their mortgage. Since the home was refinanced in their name only, the mortgage lender can only go after them.

This becomes tricky if the party who wants the home cannot afford it or cannot qualify for a mortgage on their own. There may be pressure from them to stay on the mortgage to help them or to wait to refinance until their credit is better. This, again, is a very precarious situation for you, and it’s one that entirely benefits the other party without doing anything for you.

Protecting Your Best Interests During Property Division

Don’t panic if you’re currently imagining the worst-case scenario. Everyone considering divorce has that moment, but with a reliable attorney and a clear idea of what you want, you can negotiate for a fair asset division agreement.

No matter what, there will likely be some compromise involved. It is rare for one party to walk away with everything they want in a divorce. The key is knowing what your hard limits are, what you will not give up, and where you are willing to compromise.

Legal assistance is especially important if you have complex properties to divide. For example, if you own intellectual property, a family inheritance, a business, or a family business, your asset division doesn’t just affect you. It also impacts those who have a stake in your business or IP. For many who fall into this category, maintaining full control of their business, inheritance, or IP is the top priority.

Assets That May be Protected in Your Divorce

A protected asset is one that cannot be included as part of your divorce settlement. These are property or things of value that belong to one spouse or the other, but not both. There are numerous types of assets and property that may be considered protected. But inheritances and gifts and pre-marital property are two of the most common. Here’s more about why premarital property and gifts or inheritances are protected in Alabama divorces.

Inheritances and Gifts

Any inheritance or gifts that are left to specific individuals are considered a separate property. This means that they are not subject to equitable distribution laws. However, you may need the assistance of your divorce lawyer in order to prove that your gifts or inheritance are considered separate property. This can be done by providing proof of a will, a deed, or other documentation that specifically names one spouse as opposed to both.

Premarital Property

Property and assets that each spouse brings into the marriage are considered pre-marital property. However, this can easily change if these assets or property become marital at any point in the marriage. For example, if one spouse owned the home that you now both share, once the other spouse moved in, the home may be considered marital property.

Another example could be bank accounts that have only one spouse’s name on them. If the other spouse has regular access to the accounts and the accounts become marital, then the contents will also be subject to equitable distribution as well.

Turn to Coumanis & York for Help with Your Divorce Case

With the right team beside you, you can navigate divorce with minimal stress and uncertainty. To take the first step, contact Coumanis & York today to set up a consultation. Call us at 251-990-3083 or get in touch with us online to get started.