Marital property division is one of the most contentious issues in divorce other than child custody. Separating the marital property can be a very complex process.
Marital property division is very complicated and requires trained professional lawyers. At Teston and Burruss, we focus on protecting your financial interests every step of the way. We engage forensic accountants and professional evaluators to evaluate marital assets and their division before court orders are passed or settlement agreements are signed.
How Are Marital Assets Divided in Georgia?
Most assets acquired during the period of marriage are considered the joint property of both the spouses. Inheritances and personal gifts are not always included in these. The assets and debts included may be retirement plans, including 401(k)s and teacher retirement plans, bank accounts, stocks, vacation property, vehicles, credit card debt, and other assets and liabilities.
The courts in Georgia follow the rule of equitable property division during divorce. This means all marital property, debts, and assets must be divided equitably. Equitably does not mean 50-50, between both the parties. This makes it very challenging to decide when higher stakes are involved. The court will take several factors into consideration to reach an equitable division including the following:
- The time period the marriage lasted
- Postnuptial or prenuptial agreements
- The physical health, age, earning potential of both the parties
- The financial needs of both the parties
- The conduct of each spouse during the marriage
- Any separate assets or nonmarital property
The lawyers at Teston & Burruss will work endlessly to protect your interests and make sure you don’t end up with extra financial burden post-divorce that was not your responsibility in the first place. For instance, if both the parties’ names are on a credit card that only your spouse uses, you shouldn’t be stuck paying for it after a divorce.
What Will Happen to the House?
When a couple divorces, what happens to the house can be a huge concern for both parties involved. A marital home holds a lot of emotional and financial value for both the parties. Who gets to stay in the house, will the house have to be sold, who invested more in the property, are all questions that arise and will have to be looked into before a division agreement is reached or a court hearing is conducted.
Some of the most common settlements may be:
- The house can be sold and the equity (or debt, if the mortgage was underwater) can be divided.
- If one party was the cause of the breakup of a marriage, the judge may decide that it isn’t fair to ask the innocent spouse to lose the marital residence.
- If you have minor children, the judge may decide that it would be in the best interests of your children to continue to live in the marital residence with the parent who has primary physical custody. In this case, the judge may set a future date at which time the house would be sold, and the equity divided.
- You and your spouse could exchange assets of equal value: for example, giving up your right to a percentage of your spouse’s 401(k) or other retirement plan funds in exchange for the marital residence.
- Less common resolutions include both spouses moving out and renting the homestead to a third party.
The partners might end up exchanging assets, but one thing should be kept in mind, equity in a home is not worth as much as cash in today’s real estate market. There is no guarantee that the house will sell for a certain amount and will remain on the market for long. When exchanging assets, you also need to consider the tax consequences. IRA and 401(k) accounts are taxable upon withdrawal of funds, while a one-time capital gain on a house may not be taxable.
Common Questions About Divorce and Keeping The House
A house can be the biggest asset acquired during a marriage hence it becomes the biggest headache too, when questions about division come into play during a divorce. If there are children from the marriage, questions like who gets to stay in the house and what is better for the children’s future will be considered.
Family law issues involving your home during divorce become very complicated because every divorce varies with the situation, like assets, number of children, investments, and debts. However, our family law lawyers at Teston & Burruss will address any additional difficulties regarding your home. Do any of the following questions apply to you:
- Who can stay in the house while the divorce is in progress?
- What if only one of us is listed on the home title?
- What if my spouse and I have different value estimates of our home?
- I’m not sure if I can afford staying in my house. What are my options?
- My spouse is not vacating our home after a court order.
- My spouse hinders the sale of our home as per our divorce agreement. What can I do?
Regardless of homestead issues and however complicated they may be, there are solutions. Working with lawyers with experience will get you the results you are aiming for during a divorce.
Division of an IRA in a Georgia Divorce
Under Georgia law, all contributions made by either spouse during the marriage to any retirement account, whether a 401(k), an IRA, or a pension-are subject to equitable division. An IRA is an important facet of people’s lives. A retirement account is meant to ensures that the latter years of a person’s life after retirement are not a struggle financially.
At Teston & Burruss, our lawyers are mindful of the needs of our clients and make sure the case is handled in a timely and cost-effective manner. Our dedicated team of lawyers handle all types of equitable division financial retirement accounts, including:
- Traditional IRAs involving tax-deductible contributions
- Roth IRAs involving post-tax contributions
- SEP IRAs that allow employers to contribute to employees’ traditional IRAs.
- Savings Incentive Match Plan for Employees (SIMPLE) IRAs that require employers to match employee contributions
- Self-directed IRAs that allow individuals to make retirement investments
In divorce, a retirement account can often be divided without using a qualified domestic relations order (QDRO). Sometimes, however, a QDRO is required. A QDRO allows people to withdraw money from a retirement account early without having to pay a penalty.
Dividing Businesses and Practices in an Atlanta Divorce
Division laws are complex when it comes to equitable property. In cases where a private business existed before marriage it will still be considered for division if:
- The value of the business increases during your marriage
- Your spouse contributed to the business, either by working for the business or by contributing in other ways (such as contributing towards household duties while you focused on your business)
- You contributed marital property assets to the business
- You included your spouse’s name in the business
Am I Responsible for My Spouse’s Credit Card Bills?
Once all marital debts have been identified, there are no special rules for debt division other than to look at how the debts should be charged based on “equity” or fairness. Many people are blindsided by their spouse’s credit card bills. One way of avoiding additional debt is to cancel all joint credit cards immediately after you have decided to part ways and go for a divorce. However, you should always consult with an attorney before following through with a decision like this to ensure you will not be violating a court’s standing order.
It does not matter if the credit card was opened under your spouse’s name alone. The card, if acquired during marriage, will be considered marital and the debt divided equitably. An exception is if the card has been excessively used for personal use (such as taking a girlfriend to Las Vegas), in that case the judge would assign those debts to your spouse. The credit card company will still hold you accountable if it is a joint account and that could affect your credit rating.
How Can I Keep My Spouse from Running Up Credit Card Debt?
It is very common for couples to have more debts than assets when getting divorced. If you plan on getting divorced in the future, it will be a good idea to cancel all credit cards from your name and open new ones with your name alone. Any debts on the previous canceled card will still have to be jointly paid off.
Forensic Accounting: Following the Money Trail
Forensic accountants are needed in some cases where marital assets are complicated. This is typically in cases where the parties own a business or in situations where you feel your spouse is deceiving you about where the money went.
Forensic accountants are not required for every divorce but for ones where active deception or hidden accounts are present. Our lawyers will give you the true financial picture and help you get the best out of any situation.