Division of Property

During divorce proceedings, the division of property has to be handled delicately, right along with child support and alimony. Who gets the house, who gets the best car, who gets the stocks and bonds and who gets the bank accounts are really big, volatile issues in a divorce proceeding.

If there is no prenuptial agreement, and if the spouses cannot decide on an equitable asset dissolution, then the courts will have to make a decision based on the amount of property involved and whether or not it was obtained during the marriage.

In many states, property is awarded equally, thereby minimizing the chances that one person, or his or her divorce attorney, is better at negotiating than the other, thereby walking away with more than his or her fair share.

Community property that includes real estate, bank accounts, jewelry, furniture, cars, and other assets, along with debts that were accumulated during the marriage, are divided and distributed equally, unless there was a prior legal agreement that provides otherwise.

Other assets that are considered community property and are divided equally include pensions, life insurance policies, stocks and bonds, business assets, and other tangible items that hold present or future value.

The spouse who is awarded custody of the children of a marriage may be allowed to keep the house, a car, and the furniture if those items are not needed to balance debt obligations, otherwise, the house and furniture may have to be sold.

• Some states have already begun looking at degrees and other professional certifications as community property in order to reconcile future earnings. It is based on the premise that while the one spouse attained the degree or other certification, the other spouse either worked or took care of the home and children to support the other's educational ambitions and made getting a degree possible. Now the spouse with the degree has the potential of earning higher wages or salaries, while the other spouse, after the divorce, has to languish in a lower paying job or position.

All asset that were owned prior to the marriage and some gifts that are acquired during a marriage may not have to be divided as community property, but in some instances, it will have to be proven by documentation.

The division of community property provides that the assets accumulated during the marriage is due to the efforts of both spouses and thereby, should be divided equally as such.

Finance Topic of the Month: Federal Deposit Insurance Corporation (FDIC)