What’s Ours….is Mine!

By | November 7, 2007

When it comes to property division, how you divide your assets makes all the difference. The following are some basics to help ensure that you get your fair share.

“Community Property” vs. “Equitable Distribution’ states

Division of martial property conventions in the United States fall into two basic categories: (1) the “community property” states, and (2) the “equitable distribution” states.

(1) Community Property States:

“Community property” states essentially view all of the property obtained during the course of a marriage as being owned equally by the parties. The “community property” states are: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.

(2) Equitable Distribution States:

All other states follow the equitable distribution convention, which means that upon divorce the property will be divided on a more or less fair or “equitable” basis between the two parties.

Retirement and Pension Plans

In most states, the value of benefits in retirement and pension plans accumulated during a marriage are subject to redistribution by the courts upon divorce. In order to determine the value, contact administrators and ask them to give you an estimate of the current value. If you’ve been married for a considerable amount of time, it is probably a good idea to contact a professional actuary, accountant, or attorney to help you arrive at an actual detailed valuation.

Since a retirement plan can’t be divided without terminating it and cashing it in, the most common resolution employed is for the spouse who owns it to retain the full interest in the plan and settle up with the other spouse by means of a trade-off. A portion of the spouse’s share in the family home, a bank account, or a full paid off car are a few examples of marital property that might be used in a trade-off with a retirement plan.

Stock-option or Profit-sharing Plans

The value of stock-option or profit-sharing plans are also included in the total amount of marital property to be shared and divided. Similarly to retirement plans, the tricky part is evaluating the value of the benefits. Contact the employer or the administrator for assistance in determining the value.

Social Security Benefits

Social Security benefits are not considered marital property, and therefore, are not subject to division. However, the value of such benefits may be considered when determining the amount of alimony or property to be allocated to a spouse. Contact your local Social Security office to determine your rights to benefits after divorce.

Persons who have been married longer than 10 years will have a right to Social Security benefits that accrued during the marriage, and will generally be eligible for survivor benefits as well. If you are approaching the fulfillment of your tenth year of marriage, be aware that divorce prior to the 10 year mark may result in a significant loss of Social Security benefits.

Military and Federal Pensions and Benefits

Generally military retirement pensions and federal civil service annuity benefits are subject to division upon divorce. Military disability pay, however, is not. In order to share in the benefits that have accrued to your spouse, you must have been married for at least 10 years. A 20 year benchmark must be fulfilled in order to retain certain other benefits, such as PX and commissary rights. Get in touch with the agency or service branch that administers the plan or benefits to determine the value of your benefits.

Similarly to standard retirement benefits, an actual division of military and federal benefits will be difficult, and a trade-off is recommended.


Cars and other automobiles are considered to be marital property and are subject to division upon divorce. Division can be accomplished either by selling the vehicle and splitting the proceeds, or by a trade-off of one party’s portion of the vehicle’s value. If either spouse plans to hold onto the vehicle, a trade off must be made, and a transfer of title and registration must follow if necessary.

The first step is to ascertain the real market value of the vehicle. Recommended methods include: consulting a car value website such as kellybluebook.com, or checking with a bank or car dealer to find the Blue Book value. Once you’ve determined the current market value, subtract the amount owed on the car and then divide the equity value between the two of you.

Educational Degrees

Often the spouse who did not earn the degree has sacrificed important educational or professional opportunities of his or her own so that the other spouse can earn the degree. Accordingly, the value of an educational degree earned during the marriage is incorporated into the marital property and is thus subject to division. It is, however, very difficult to place a specific value on the future earning potential value which is directly traceable to a particular degree. If you feel that the value of a professional degree is an important factor in your situation, seek professional assistance from either a qualified accountant or attorney.

How Can you protect yourself?

The best way to protect yourself is by getting a prenuptial agreement. A prenuptial agreement, also known as a premarital agreement, is a contract between two people who intend to get married. The couple writes down an inventory of what each person owns, including property and assets, but also debts. This specifies how what will happen to joint marital property in the case of divorce, and also in the case of the death of a spouse. Generally the prenuptial agreement will state that both people keep what assets they bring into the marriage. The document will also specify how property, assets, and debts acquired during the marriage are divided; typically, a 50/50 split. Prenuptial agreements, or premarital agreements are no longer for the rich and elite. They can be an effective tool in protecting anyone’s assets. Of course, it is always a good idea to consult a lawyer before signing any legal document.

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