This is part two of a four-part series.
Click for part one.
Now that you are familiar with the concept of equitable distribution, the next question revolves around how assets and debts are allocated to each spouse. The simplest – albeit vague – answer is it depends on your particular circumstances. Many people assume “equitable” means all the property in each person’s name will be split 50/50. However, factors such as premarital assets and disparity of income may yield a different result.
Since Georgia is an “equitable division” state rather than a “community property” state, a spouse is generally entitled to keep all of his or her premarital assets. If premarital assets were commingled with joint marital assets or the joint efforts of the parties caused the value of the premarital assets to increase during the marriage, they may effectively be treated as joint marital assets. So, each party should be careful to understand how these assets may not be shielded from an equitable division.
Another significant factor to consider is the disparity in income between the husband and wife. If husband, for example, makes a six-figure salary while the wife stayed home with the children, the wife may arguably be entitled to a greater proportion of their retirement assets due to her now-diminished ability to “make up” for the decrease in her savings/earnings (this also gives rise to a claim for alimony).
In practice, however, equitable division may become murky when dealing with depreciating assets and consumer debt. Technically, if the wife drives a nicer car, the husband should be entitled account for a portion of amount wife’s car exceeds the value of his car. Also, the parent who is named the primary physical custodian of the children is likely to retain a greater proportion of the furniture and furnishings from the marital home. Finally, each party may differ on who is responsible for accruing credit card debt. Short of spending thousands of dollars to hire an expert, allocating these debts is difficult or impossible. Negotiating a settlement of all assets and debts is not always an exact science, so it is essential to hire an attorney who is competent to represent your best interests.
Stay tuned for more information about how assets are divided in a divorce. I will elaborate on a few more complicating factors regarding the division of assets and how to craft an agreement to the parties’ mutual advantage.
Please contact my office for information specific to your case. The above is for general information purposes only.
Source: Dan E. McConaughey, Georgia Divorce, Alimony & Child Custody, 2011-2012 Ed., West.