Property and Debt Distribution
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- What happens to property and debt when there is a divorce?
- How is property divided in a divorce in Wyoming?
- What is equitable distribution?
- What kind of property is divided in a divorce?
- If title to property is in my name, do I automatically get it in a divorce?
- How is property divided if the couple is not married?
- After the divorce, who is responsible for debts that occurred during the marriage?
- After the divorce, who is responsible for a debt only one spouse signed for during the marriage?
- What can I do if my ex-spouse does not pay the bills as ordered in the divorce judgment?
- Are retirement and pension accounts considered marital property?
- How will divorce affect my taxes?
What happens to property and debt when there is a divorce?
It is always easier if you and your spouse can reach an agreement about property and debts. However, if it is unlikely that you will be able to come to such an agreement, you will have to go to court where a judge will decide who gets what property and who has to pay what debts. The FindLaw Guide to Divorce and Property Division provides basic information on property division during a divorce.
How is property divided in a divorce in Wyoming?
Wyoming is an “equitable distribution” state, meaning the court will divide the property in a way that is fair considering several factors. In some cases, a fair division will be an equal (50/50) division. In other cases, however, the judge may decide to award one spouse a greater percentage of the marital property.
There are no hard and fast rules that determine who gets what property in a divorce action. The factors a judge may consider are
- Where the property came from (gift, inheritance, purchase);
- If one spouse owned the property before the marriage;
- If the spouses kept their money in joint or separate bank accounts;
- How much money each spouse is making now and is expected to make in the future;
- Whether it would make sense for a specific item to go to the parent with custody.
The court has considerable discretion when deciding how much weight these factors are given.
What is equitable distribution?
Equitable distribution is based on the idea that marriage is a partnership. Both spouses contribute to the partnership directly and indirectly, financially and non-financially, and the product of those contributions is able to be divided. Basically, a court will value the contributions of the spouse who is primarily responsible for raising the children, making a home, and an array of other personal services even though these contributions are not in the form of money.
Helpful things to know about equitable distribution in a divorce action:
- Everything purchased during the marriage is subject to division.
- Whose name or money was used to buy the property is not controlling.
- The spouses, not the judge, have to prove what property exists.
- Neither spouse should get rid of or sell off property in anticipation of divorce. Doing so may result in that spouse having to pay the other spouse back her or his share.
- The court takes into consideration the merits of the parties and the condition in which each will be left after the divorce.
What kind of property is divided in a divorce?
The type of property that will be divided is any land or houses, motor vehicles, home furnishings, money in bank accounts, stocks and bonds, pensions and retirement benefits, etc. The judge can also decide who should pay the marital debts. You should get a lawyer if retirement benefits, pensions, or real property (land or a house) will be issues in your divorce case. All marital property has to be divided, even the smaller items. This FindLaw.com checklist will allow you to formulate a property distribution for consideration in your case.
If title to property is in my name, do I automatically get it in a divorce?
Not necessarily. While a court may consider title as evidence of separate property, title in and of itself does not determine whether an asset is separate or marital property. For more information, this Justia.com article answers many Frequently Asked Questions about equitable distribution.
How is property divided if the couple is not married?
If you and your former partner do not agree on how to divide your property, you will almost certainly need an attorney, and a judge will most likely have to decide. It is a good idea for unmarried couples to have a written agreement about property at the time they begin living together.
After the divorce, who is responsible for debts that occurred during the marriage?
The divorce judgment will state which spouse should pay the debt but, for joint debts, you are both responsible for making sure that the creditor gets paid. If you both agreed to be responsible to pay at the time of the purchase, a divorce judgment does not change the creditor's right to expect payment from both or either spouse.
If the bill is not paid, a creditor can ask for payment from both spouses. The creditor can also file a lawsuit against either one or both spouses for the unpaid bill.
After the divorce, who is responsible for a debt only one spouse signed for during the marriage?
The divorce judgment will probably state which spouse should pay the debt. But if the spouses were living together when one spouse made the purchase for family expenses, the other spouse is usually also responsible to the creditor and could be sued, too. If the spouses were separated when one spouse signed for the debt, the other spouse might not be responsible to the creditor unless the debt is for the children's education, health, or support needs.
What can I do if my ex-spouse does not pay the bills as ordered in the divorce judgment?
You can tell the creditor that your ex-spouse was ordered to pay in the divorce judgment. You can also give the creditor information about how to find your ex-spouse. In many cases, especially if your ex-spouse has more money than you do, the creditor will first try to get payment from the spouse who was ordered to pay the bill in the divorce. If you pay the bill or if the creditor brings a lawsuit against you, you may have the right to take your ex-spouse to court so you can get reimbursed (paid back) for the money you paid. It is important that any court order be specific about who is to pay which debt and what will happen if he or she doesn’t pay the debt ordered.
Are retirement and pension accounts considered marital property?
The Supreme Court of Wyoming has determined that retirement funds and pension accounts are marital property, whether vested, non-vested, or not matured, and are divisible upon divorce. Division of this type of property is very complex and there is no specific rule or arrangement that is applicable to each individual case. If you do have a retirement fund or your spouse has a retirement fund, you should seek the help of a legal professional.
How will divorce affect my taxes?
- Child Support: Child support payments are neither deductible by the parent paying support nor taxable income to the parent receiving child support payments.
- Exemptions: Usually, the parent who has legal custody has the right to claim the child as a dependent for tax purposes, but can sign a form to give the other parent this right. For information about exemptions you should talk to a lawyer or call the IRS.
- Spousal Support: You have to pay taxes on spousal support payments you get and you can deduct spousal support payments you make. The Internal Revenue Service has special rules about what payments qualify as spousal support for tax purposes.
- Property Transfers: There are special tax rules about property transfers. For information about taxes, you can talk to a lawyer, accountant, tax preparer, or contact the IRS.