How Are Assets Divided in a Divorce?

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By Richard

A divorce has many aspects, and one of the most important of them is of course, the division of assets and liabilities related to the divorce settlement. Assets may be personal or jointly owned. They may be items of inheritance or those related to business. They may even be assets related to a previous marriage or amounts related to the compensation of personal injury lawsuits.

While you and your spouse may be debating who gets what when it comes to the distribution of property and other assets, property division laws have certain provisions that differ from state to state regarding the distribution of assets and liabilities. This post will look at the factors impacting the distribution of assets in a divorce.

Difference Between Marital and Separate Property

Most states follow the rule that only marital property will be divided in a divorce, while you and your spouse can keep separately owned properties. Marital property includes any money or other assets that either spouse earned or acquired during the marriage. Separately owned property includes property that a spouse owned before getting married, inherited property or gifts to one spouse, and part of some personal injury awards.

Methods of Dividing Assets

When it comes to the division of assets after a divorce, states may follow equitable property distribution or community property distribution laws.

Equitable Property Distribution

The majority of states follow the equitable distribution model. In these states, a fair but not necessarily equal division of assets is determined based on various factors. According to experienced Boston divorce lawyers at Wilkinson & Finkbeiner, these factors may include the duration of the marriage, each spouse’s financial contribution, and their individual needs.

Community Property Distribution

There are currently 9 states that follow community property rules for determining the ownership of married couples’ assets and liabilities. These states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Washington, Texas and Wisconsin. They are called community property states. In these states, marital property is considered jointly owned, and each spouse is entitled to an equal share. This includes income earned, debts incurred, and assets acquired during the marriage.

Other Factors Influencing Division of Assets

There are some common factors that play a role in how assets are divided in a divorce.

  • Length of the Marriage

While longer marriages can lead to a more equal distribution of assets, shorter marriages may result in a more straightforward division.

  • Financial Contributions

The financial contributions of each spouse during the marriage in terms of income, savings, and investments will be reviewed. 

  • Individual Requirements

The earning ability of each spouse and their financial needs will be reviewed.

  • Child Custody and Support

 Child custody arrangements and child support obligations affect the distribution of assets..

  • Health Status 

The age and physical and emotional health of each spouse will be considered.

Common Methods of Asset Valuation and Division

The next step is looking at how to value and divide the assets. This stage can be complicated and often needs the services of financial experts. It generally comprises the following steps.

  • Valuation of Properties

Experts estimate the value of the jointly owned home and other real estate.

  • Worth of the Business 

The value of any business owned by a spouse is determined. Evaluators try to work out a fair distribution.

  • Valuation of Other Financial Assets

The value of bank accounts, investments, and retirement accounts are considered.

  • Allocation of Debts

Each spouse’s share of marital debts is worked out. 

  • Personal Property Appraisal

Valuables such as jewelry, art, and furniture may require a professional appraisal.

Some Challenges

Sometimes, the distribution of assets can present challenges for settlement. These are generally of the following kinds:

  • Non-Disclosure of Assets: A spouse may decide not to reveal their ownership of property or other assets. This will keep their spouse out of this ownership.
  • Effects of Taxation: The tax implications of owning the assets must be considered.
  • Existence of Prenuptial Agreements: If the spouses signed an agreement before marriage regarding separate ownership of property, this cannot be attached to the asset distribution.
  • Emotional Factors: Sometimes, the refusal to act rationally due to sentimental attachment to certain assets can affect their distribution. 


The distribution of assets of various kinds after a divorce decision can take a long time to settle. There has to be full disclosure to effect an equitable distribution. You would have to get the services of an evaluator to determine the value of various assets and a lawyer to see which assets are legally admissible for sharing between the spouses.

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