levitra"> levitra"> Dividing the Marital Estate
levitra

Click to go home.

Google
 

Search:
 

Survival Tools
& Resources
Divorce & Finance Blog
Divorce Discussion
Forums
Divorce Help Desk
Divorce Resource Library
Professional & 
Resource Directory
State Divorce Information
New Trends in Divorce
 
 
Divorced or Separated Individuals (IRS Pub 504)
Divorce News
Subscribe to Divorce Interactive News
Ask the Expert
     Financial Planner
Columns
     Parental Guidance
     Child-Centered Solutions
Divorce Interactive Newsletter
Divorce Books
Glossary





Dividing the Marital Estate

Dividing the Marital Estate

By Maury D. Beaulier, Esq.

 

Index
Overview
Valuing the Marital Estate

Dividing the Marital Estate
Not All Assets are Created Equal

 


Overview

Marital property laws in Minnesota and Wisconsin define the marital estate (community property) as any asset acquired during the marriage whether that asset is held in the name of either party or both. This specifically includes real estate, cars, pensions, 401K plans, business interests, stocks, bonds, stock options, dogs, cats, chairs, collectibles and bank accounts etc . . . Property that does not have to be divided in divorce is called "non-marital property." Non-marital assets are generally defined as anything acquired by a spouse before the marriage, or during the marriage by gift, devise or bequest.

Valuing the Marital Estate

In most cases, the marital estate is divided equally unless there is written and binding pre-nuptial agreement to the contrary. To divide the marital estate, it is first necessary to determine the equity of the assets. The equity is determined by arriving at a fair market value (how much would a buyer be willing to pay) and subtracting out any secured encumbrances. For example the equity in a home could be determined by taking an appraised value and subtracting out the secured mortgage, second mortgage, secured lines or credit, home equity loans and outstanding property taxes.

Valuing assets may require the aid of an appraiser. To reduce costs, it is often most effective for the parties to jointly choose an appraiser and divide that expense. Appraisers are available to value real estate, vehicles, business interests, collectibles and other assets.

Dividing the Marital Estate

Once you have determined the relative values and encumbrances of the assets, they can be divided by creating a spreadsheet (See Chart A below). he equity of any asset awarded to a party is offset by the payment of any debt obligation by the party to ideally arrive at an equal property division.. In this fashion, it is not necessary to divide each asset equally. It is only necessary that each party receives a substantially equal share of the marital estate. Ideally, the division of assets and debts will result in totals that are equal. When that does not occur, such as in the chart below, one spouse may be required to make a cash payment to equalize the division of assets. Often this is accomplished with the party awarded the homestead refinancing the mortgage in an amount sufficient to retire the other spouse's interest. In the example below, wife could refinance to pay the husband the sum of $6,500 (one half of the difference between the values awarded to the wife and the husband.)

Chart A

ASSET/LIABILITY Value Awarded to
WIFE
Value Awarded to
HUSBAND
House (Value $200,000 - Mortgage 140,000= $60,000)

$60,000

 
2000 Toyoto Tercel (Value $18,000 - Loan $10,000= $8,000)  

$8,000

1996 Honda Accord (Value $10,000 - Loan $11,000= -$1,000)

(1,000)

 
Ford F-150 (Leased)  

$0

401K  

$25,000

Pension  

$5,000

Stocks  

$2,000

Visa Card

($3,000)

 
Mastercard





DivorceInteractive.com tries to provide quality information, but cannot guarantee the accuracy, completeness or adequacy of the information, opinions or other content posted on the site. It is not intended as a substitute for and should not be relied upon as legal, financial, accounting, tax, medical or other professional advice. It should not be construed as establishing a professional-client or professional-patient relationship. The applicability of legal principles is subject to amendment by the legislature, interpretation by the courts and different application by different judges and may differ substantially in individual situations or different states. Before acting on what you have read, it is important to obtain appropriate professional advice about your particular situation and facts. Access to and use of DivorceInteractive.com is subject to additional Terms and Conditions. DivorceInteractive.com is a secure site and respects your Privacy.


Home  |  Advertise With Us  |  Professional & Resource Directory
Divorce News  | Glossary  | Divorce Discussion Forums
Change Area Code  | Terms & Conditions/Legal Disclaimer  |  Privacy Policy  |  About Us   |  Contact Us

2001-2010 DivorceInteractive.com  All Rights Reserved.