Have you decided to split from your spouse? If so, then it’s critical to have an idea of property division laws, which vary from state to state.
Property division will be a critical factor throughout any divorce proceedings. Your property will be inventoried, valued and then finally divided. This can be accomplished through an agreement between both parties or a decision from the court.
An accurate assessment of the property prior to your separation will provide valuable insight into what the settlement will entail.
Property Categories
The first step is determining whether property is marital or non-marital.
Marital property includes most assets and debts obtained during the marriage. All property acquired by either spouse before a decree of legal separation is filed will be considered marital property, unless proven to be non-marital. Separate property can be converted into marital property through a prenuptial agreement or a conversion to joint ownership.
Non-marital property includes property received as a gift or inheritance by one party or property owned before the marriage began. Income from this property that increases in value during the span of the marriage is also typically considered separate.
Often through the years, non-marital property will be combined through joint bank accounts, mortgage payments or retirement accounts, which increases the difficultly in deciding what items belong to which person during a divorce.
If you want to qualify property as non-marital, the court will require you to trace the origin of each item. A way to do this is to gather ownership or gift records to illustrate the details of the when, where and who of each piece.
Assessing Value
The next step is to assess a monetary value for each piece of property. First, take inventory of property owned before the separation, including non-tangible items such as bank accounts, investments and interests in businesses.
Then, place a value on each asset, using the most recent tax document, appraisal or declared value of insured assets. For items that these documents are not available, research the fair market value taking into account its current condition. Consulting an appraiser or financial professional could be useful to determine the correct amount.
Retirement Funds
It’s also important to consider how retirement funds will be divided and which portion of growth could be deemed as non-marital assets.
Qualified Domestic Relations Orders (QRDO) are the most common tool for dividing marital portions of retirement assets. It’s important to consult with your financial planner or plan administrator before the separation to better understand how retirement assets are divided.
Division of Property
Property can be divided either by earmarking certain items for one spouse or by selling the property or possessions, then dividing the proceeds. Most times, each spouse will be awarded assets that are proven to be their non-marital property.
Both Kentucky and Tennessee are equitable distribution states. This is defined as fair but not necessarily equal division of assets. Debts also have to be assigned to the parties during a divorce.
The factors that impact this decision also differ from state to state. If an agreement cannot be reached between the two parties, the court will consider the following factors:
Kentucky
Tennessee
One major difference between the divorce proceedings in the two states is – economic misconduct of one party can be considered in Tennessee but is not a factor in Kentucky.
Going through a divorce in either Kentucky or Tennessee, and need help with this tricky process.
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