Georgia is an Equitable Division State
How Are Assets Divided in a Divorce?
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Steps to Dividing Assets in a Divorce
Determine All Assets & Liabilities
The first step in dividing your assets and liabilities (debts) is to develop a complete list of everything you own. At this stage, you are not worried about whether the asset is marital, and subject to division or separate property that is not subject to division. The primary objective is to develop a complete list of all assets and debts. Your list should include everything from real estate owned to various bank accounts. It should also have everything from your personal property items to business ownership interest.
Evaluate each Asset to Determine Whether They are Marital or Separate Property
Only property and debts acquired during the marriage is subject to equitable division. Assets acquired before the marriage or during the marriage by gift or inheritance, are generally considered separate property and not subject to division during a divorce.
Review Each Item of Separate Property to Determine if Certain Actions Made it Marital
Although an asset may be considered separate property, the parties' actions throughout the marriage can switch its characterization from separate property to marital property. In particular, you are looking for comingling of property or non-economic contributions that convert, at least part, of the separate property into marital property.
Divide the Assets in Accordance with Georgia's Factors for Division of Marital Property
Once it has been determined what is and is not marital property, Georgia law uses several factors to make the ultimate determination as to how best to allocate various assets and liabilities between the parties.
The M&T Difference for Asset Division
When it comes to asset division, you want Meriwether & Tharp in your corner. We have developed our own proprietary marital balance sheet that helps to identify all assets and supporting evidence needed and recommends which assets you should target as part of a divorce. We hold routine training seminars with our attorneys to improve their understanding and skills regarding various assets, cash flow, and valuation methods. Perhaps, more importantly, we put that training to the test with practice negotiations and hearings to maximize our clients' results.
Division of Specific Assets
For many going through a Georgia divorce, the marital home is their largest asset. Whether the marital home should be retained and by whom is often a significant issue. What happens to the family home will ultimately depend on the facts of each case. If the spouses agree on what will happen to the marital home and other real property, the court will likely approve such a settlement agreement. However, if the couple cannot agree, the court will decide the issue. If you are considering divorce or are currently going through a divorce, there are several options and special clauses to consider.
Not only must marital property and assets be divided upon divorce, but marital debts must also be divided. A debt usually is deemed marital when both spouses have agreed to repay the loan or credit card. However, only one party has signed for a debt is not controlling on who may bear the ultimate responsibility to pay for it as part of the divorce.
As part of a divorce, typically, each party keeps the car they are driving and is responsible for all debts, maintenance, repairs, insurance, and other expenses related to their vehicle. That said, a court does NOT have to divide cars in that manner and may consider each vehicle's relative net value and the relative maintenance costs associated with each car in making a final determination about who should get which vehicle(s).
Retirement Assets (401k, IRA, etc.)
After the family home, retirement assets are usually the second-largest asset for most families. Retirement assets include persons, 401(k) plans (and their equivalents), Individual Retirement Accounts (IRAs), and several others. When dividing these accounts, courts are NOT required, and often don't, separate them based merely upon who earned the various accounts. Instead, they are usually divided in a fair manner as part of the larger, overall estate.
Although, for many, pets are just another family member, Georgia law does not exactly see it the same way. Instead of treating dogs like a custody battle, Georgia law considers pets personal property to be divided.
Although it may not be readily apparent to most, businesses, just like real property or investment accounts, are assets that may be subject to equitable division upon divorce in Georgia. See Miller v. Miller, 288 Ga. 274 (2010). Georgia case law makes it quite clear that a business, similar to other forms of property, may be divided upon divorce if deemed marital property, or they may be exempt from the equitable division process if they are considered separate property.
Tax concerns surround various aspects of equitable division. Should you be concerned about tax effects in regards to the transfers of property incident to divorce? When do you file a joint return with your spouse? Should you be using the innocent spouse rule as a defense to previously owed taxes? Things you should know before you move forward with your divorce.
Asset Division is NOT Modifiable!
Unlike Child Support and Alimony that can be re-evaluated over time as the circumstances change between the parties, once assets are divided the agreed upon division is generally not subject to further review by the court. As such, it is critical to make sure your settlement agreement, which ultimately is the court document which documents your asset division, is done exactly the way you intended.
Asset & Debt Checklist
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Review Tax Returns
Especially if you are not familiar with your finances, one of the best places to start your review for hidden assets is your joint tax return. Properly reviewing it may help...
Hiring a qualified accountant in a case can make the difference between locating hidden assets or overlooking them, proving separate property or being forced to count it as...
Signs your Spouse is Hiding Assets
If you are going through a divorce here in Georgia, look out for the following red flags that could indicate your spouse is hiding marital assets. If you see any of the...