During a divorce settlement, there needs to be a clear agreement on everything, including kids, assets, liabilities, and properties. Because of this, arguments may arise from property settlements. This usually involves property that the couple bought before or during their marriage. But there are still a lot of intricacies to consider when it comes to settling properties, which are important to understand if you’re beginning the settlement process. Learning how property is divided in a divorce settlement can help you prepare for your new future.
What Are The Types of Property?
Typically, there are two types of property that a judge will distribute during a divorce settlement. These are separate property and community or marital property.
• Community or Marital Property
Community property refers to the properties acquired by using earnings during the marriage.
As much as it includes all the acquisitions during the marriage, it also takes into account the debt and mortgages incurred. In effect, all debt and property incurred during the marriage are classified as community property.
• Separate Property
On the other hand, separate property will include inheritance and gifts bequeathed to that certain spouse. This also includes personal injury awards and pension proceeds.
In addition, a property your spouse purchased using his or her separate funds will be considered as separate property. All kinds of property purchased or acquired before the marriage is also considered as separate property.
What Properties Can You Keep?
By understanding the two types of property, you can determine how property is divided in your divorce settlement. This helps you work with a lawyer to identify which properties you can keep. Determining which properties you can keep depends on your specific scenario. However, classifying your assets as separate or community property can help the judge and lawyers guide you through the divorce settlement.
• Offshore Asset Protection Trust
Assets, including property, that you put into an offshore asset protection trust cannot be taken away during a divorce settlement. This trust is usually established under the laws of a different country and managed by a trustee. Given that it’s under the law of a foreign country, your home country won’t have any jurisdiction.
So, if you’re facing a divorce settlement, it’ll be very beneficial if you can put up an offshore asset protection trust so that you can keep your properties. If you still need more information on this, you can check out www.milehighestateplanning.com/offshore-asset-protection
• Property Bought Before The Marriage
Any kind of property that either party bought before the marriage is separate property. This, in itself, is proof that the intent of the property is just for one spouse.
So, if you have any property from before the marriage, the law does not require you to include that in the settlement. As a result, it will remain under your ownership.
If you’ve been out of the workforce raising your children, you’ll appreciate this article: How to Prepare for Divorce If You are a Stay-at-Home Mom.
• Commingling and Transmutation
Properties that involve commingling and transmutation may be harder to provide evidence for, but you may still be able to keep them.
To start, the law defines commingled properties as assets that you bought together using a joint bank account. When this happens, it may be more difficult to prove ownership. So, you need to keep separate accounts to have good records of property ownership. If you have separate accounts and can trace back who bought it, then this may be one of the properties that you can keep.
On the other hand, transmutation is a type of separate property that the law treats as marital property. To illustrate, this usually occurs when both spouses use the property. However, in reality, just one of the spouses bought and paid for the property.
If you have records that you bought it, even if you use this property with your spouse, you can build a case to keep this property. So, when it comes to a divorce settlement, keep a good record of your purchases so you can prove this more easily.
• Property You Contributed In
Lastly, if you have a property where you and your spouse made different contributions, this can also be a property that you can keep. With records on how much each spouse has invested, you can either split the property or buy out the other spouse.
In a divorce settlement, you need to be knowledgeable about these kinds of properties to get what you feel you deserve.
Now that you know the types of properties during a settlement and what kind of property you can keep, you’ll be able to strategize more efficiently with your lawyer. Remember to consult your divorce coach about the process of divorce and your recovery and your lawyer about the legal matters.
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