Dividing Marital Property

As part of the divorce process, the court must divide the property of the parties. In doing so, the court must make a just and equitable division of marital property. All property acquired after the marriage and before the valuation date is presumed to be marital regardless of title. The spouse wishing to establish that property is nonmarital has the burden of proving the asset is nonmarital.

In making a determination of an equitable division of marital property, the trial court must consider all relevant factors and the statutory factors:

1. length of marriage;
2. any prior marriage of a spouse;
3. age of each spouse;
4. health of each spouse;
5. station and occupation of each spouse;
6. amount and sources of income of each spouse;
7. vocational skills and employability of each spouse;
8. estate of each spouse;
9. liabilities and needs of each spouse;
10. opportunity for future acquisition of capital assets for each spouse;
11. contribution of each spouse in the acquisition, preservation, depreciation, or appreciation in the amount or value of the marital property; and
12. contribution of a spouse as a homemaker.

As part of the equitable division, if a spouse, in contemplation of commencing a marital dissolution proceeding or during the pendency of a marital dissolution proceeding, transfers, encumbers, conceals or disposes of marital property without the consent of the other spouse, the court shall compensate the other spouse by placing both parties in the same position that they would have been in had the transfer, encumbrance, concealment or disposal not occurred.

Nonmarital Property

If a spouse can prove that part of the parties’ estate is nonmarital property, that property will normally not be subject to division as part of the marital estate. Nonmarital property is real or personal property acquired before, during or after the marriage, which:

1. is acquired as a gift, bequest, devise or inheritance made by a third party to one but not to the other spouse;
2. is acquired before the marriage;
3. is acquired in exchange for or is the increase in value of property which is described in clauses (a), (b), (d,) and (e);
4. is acquired by a spouse after the valuation date; or
5. is excluded by a valid antenuptial agreement.

In some cases, assets may have both marital and nonmarital components. For example, it is not uncommon for 401(k) accounts or even the marital homestead to have pre-marital values. To determine the value of nonmarital interests the court may distinguish between active and passive appreciation. In the case of a homestead, the courts apply a formula, which provides that a spouse’s nonmarital interest in a homestead purchased prior to the marriage is equal to the proportion the spouse’s net equity at the time of marriage bore to the value of the property at the date of marriage. This is often referred to as the “Schmitz” formula. Depending upon the type of asset and the particular circumstances of each case, nonmarital claims may be complex to establish.

In some cases, if the circumstances warrant, the court may award up to one-half of a spouse’s nonmarital property to the other spouse if necessary to avoid an unfair hardship on the other spouse. In determining whether an unfair hardship exists, the court must consider all factors including “the length of the marriage, any prior marriage of a spouse, the age, health, station, occupation amount and sources of income, vocational skills employability, estate, liabilities, needs and opportunity for future acquisition of capital assets and the income of both parties.” The court is allowed significant discretion in making determinations on equitable property divisions and on determining whether unfair hardship exists.

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