Understanding Marital Property in an Equitable Distribution State

Divorce is an issue that approximately one in three Americans will face in their lifetime.  When divorcing, you have to make a lot of one time financial/economic decisions that you cannot undo once the divorce is settled.  From your first day of marriage, you and your spouse will start to accumulate assets and debts that will become part of your mutually owned marital property.  Therefore, first and foremost, you should have a general understanding of marital property if you are contemplating or going through a divorce.

Most often people think marital property is automatically divided 50/50, which is not the case in Alabama.  If the divorce is uncontested, the parties can agree between themselves on the division of marital property; however, if the divorce is contested, all marital property will be divided in an equitable fashion according to the Court unless otherwise agreed to by the divorcing spouses.  Equitable simply means “what is fair, NOT NECESSARILY EQUAL.”

So what is marital property?  Marital Property is any and all property, real or personal, acquired by the parties during the marriage and used regularly for the common benefit of the marriage.  It is also sometimes referred to as joint property.

With a contested divorce, if evidence indicates that certain assets were acquired during the marriage and there is no evidence indicating that one spouse has received those assets by gift or inheritance, then those assets are generally marital property and are subject to division.  Examples of marital assets can include:

  • The marital home
  • Vehicles
  • Household furniture and furnishings
  • Joint checking or savings accounts
  • Pensions and retirement plans
  • Stock and stock options

Separate property is property owned prior to the marriage and property received by gift or inheritance during the marriage.  A party’s separate property is that property over which he or she exercises exclusive control and from which the spouse derives no benefit by reason of the marital relationship.  The Court does not have the right to distribute any separate property that was obtained before or during the marriage, i.e., gifts, inheritances — UNLESS these gifts and inheritances have been used for the common benefit of the marriage.

Like assets, debts are typically incurred in both short term and long term marriages.  Any credit card debts, mortgages, medical bills and other loans will become part of you and your spouse’s marital property, and they will be divided along with your other marital property.   With contested divorces, the Courts try to equitably divide marital debt just as they do marital assets.  Again, equitable simply means “what is fair, NOT NECESSARILY EQUAL.”   The Courts may look at:

  1. Who incurred the debt?  Was it the personal individual debt of one spouse or was it the joint debt of both spouses?
  2. The purpose of the debt?  Was the debt for the benefit of an individual spouse or for the common benefit of the marriage?
  3. What are the parties financial circumstances?  Who can afford to pay the debt and who cannot?

If the circumstances warrant it, the Court using its discretion, can order one spouse to pay the marital or joint debts of the parties, assign the debt of one party to another and/or equitably divide the debt and the obligation to pay it between the Husband and Wife.

If you are contemplating or going through a divorce, you should take the time to review your individual situation with an experienced attorney who can protect you and your best interests.  Family and divorce practice requires experience in financial, property, estate and divorce law.  Our role at Rahmati Law Firm, LLC is to provide the comprehensive representation you need to understand and protect your personal and family interests.  Our attorneys stand ready to assist you in preparing for the next step in your life.

 “No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers.”

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