Family Law

PROPERTY AND DEBT DIVISION
Yours, Mine and Ours

It is common for a divorcing couple to decide about dividing their property and debts themselves, rather than leave it to the judge. But if a couple cannot agree, they must submit their property dispute to the court which will use state law to divide the property.

In Georgia, marital property is subject to what we call "equitable division". That is, the marital property is divided using principals of fairness in the given situation. Property acquired during the marriage, regardless of how that property is titled, can be subject to division. For example, one spouse's retirement account may be subject to division between the parties even though the contributions were made only by the employer of one spouse. Insurance policies, savings accounts, annuity benefits, 401Ks and IRAs are treated as marital property to the extent that contributions were made during the marriage.

Not all property acquired during marriage is "marital property". For example, if one party receives a gift or an inheritance, it is the separate property of that person and not subject to division.

The task, then, will be to determine what property is marital and what is separate. Generally, marital property includes all earnings during marriage and everything acquired with those earnings. All debts incurred during marriage, unless the creditor was specifically looking to the separate property of one spouse for payment, are marital property debts. Separate property of one spouse includes but is not limited to gifts and inheritances given just to that spouse, personal injury awards received by that spouse, and property owned by one spouse prior to the marriage. Furthermore, property purchased with the separate funds of a spouse remain that spouse's separate property. This can get complicated. If, due to the efforts of the other spouse, the separate property increases in value, that appreciation may be subject to division. To further complicate the matter, property purchased with a combination of separate and marital funds is part marital and part separate property so long as a spouse is able to show that some separate funds were used. Separate property co-mingled with marital property often becomes marital property.

When contemplating divorce, it is important to consider the financial history of the entire marriage, beginning with what each spouse brought into the marriage. If separate funds were contributed to the purchase of homes and property, settlement statements, closing documents, deeds, bank statements and cancelled checks may be needed to trace the separate assets.

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