As part of the divorce, any property owned by either party must be divided between them including any real property, retirement and savings accounts, stocks, bonds and other financial assets, vehicles, furniture and other personal property, and business interests.  Like almost everything else in a divorce, the parties can come to an agreement between themselves on how to divide their property.  However, if they do not agree, then the court must determine how to divide their property.  This can be a daunting task.  Each item of property must be identified, valued and fairly divided between the parties.  Both parties are required to disclose to the court and to each other any property in which he or she has an ownership interest.


The court must first determine whether the property is “marital property” or “separate property.”  Marital property is typically any property acquired by either party during the marriage.  Separate property is typically any property owned by one spouse prior to the marriage or received as an inheritance or gift by one party during the marriage.

However, the court can, under certain circumstances, determine that all or part of an item of separate property has been converted into marital property.  The most common way this happens is where a spouse comingles his separate property with marital property to the extent that it becomes difficult or impossible to separate the two.  For example, let’s say that the husband owned a home prior to the marriage.  However, during the marriage, the husband used marital income to pay for the mortgage, insurance, taxes, maintenance, etc. on the home.  At the time of the divorce, the value of the home and the value of the equity has increased, due at least in part to the parties’ joint efforts and payments.  In such a case, the court could determine that some, or all, of the value of the home has now become marital property.


The general rule is that each party is entitled to his or her own separate property and one-half of the marital property.  However, the court has discretion to divide the property in a fair manner, even if the division is not completely equal.  There are a few common issues that need to be resolved when dividing property:

  • Marital home – often, one spouse wants to continue to live in the marital home after the divorce.  In such a case, that spouse must figure out (1) how to get the other spouse’s name off of the mortgage, and (2) how to cash the other spouse out of any his or her share of the equity in the home.  A refinance of the mortgage may be able to solve both problems.  If, however, the now single spouse does not have sufficient income or credit to qualify to a refinance, then the home would likely have to be sold.


  • Retirement accounts – each party is entitled to half of the value of any retirement accounts owned by either party, regardless of whose name the account is in.  Cashing out the funds for such accounts may incur costly taxes and penalties, and the parties must determine who is responsible for these costs.  As an alternative, the parties can obtain a separate court order directly to the retirement account manager requiring the account to be split and a portion of the funds transferred into the new account in the name of the other spouse.


  • Business interests – each party is entitled to half of the value of any business interests owned by either party, regardless of whose name the business is in.  Determining the value of the parties’ ownership interest can be complicated and may require hiring a forensic accountant or business valuation expert.  If one party wishes to keep his or her interest in the business, he or she must figure out how to cash out the other spouse for his or her share.  This can be difficult for a business with little capital or liquid assets or where a spouse only owns a minority share of the business.


In addition to dividing the parties’ property, the court must also determine who is responsible for any debts or ongoing financial obligations owed by either party.  The general rule is that neither spouse is personally responsible for the separate debts or obligations of the other spouse.  The exception to this rule is for “family expenses,” such as debts incurred to provide for the parties’ living expenses, children’s medical bills, family vacations, etc.  The court may determine that both parties are responsible for such debts and obligations.  In addition, there may be truly joint debts such as mortgages, car loans, tax liens, etc. that one or both parties must take responsibility for.  The court can divide such joint debts or family expenses in whatever way is fair and equitable, even if not completely equally divided.

For more information on other topics related to divorce, please visit our family law page or our frequently asked questions section.