How Does Money Get Divided in a Divorce

In most cases, money and other assets, that are acquired during the marriage, are divided somewhere in the neighborhood of 50%/50%. In a minority of states, called “community property states”, 50/50 is the law. Even if you are not in one of those states, and you live in a what is called an “equitable distribution” state, you still need to be prepared for a 50%/50% division. It is very common.

If you want a division other than 50/50 for your marital property (assets acquired during the marriage) you need to be prepared with some very specific and compelling arguments.

Here are the steps that we go through, in divorce mediation, when settling the division and distribution of your money and other assets:

STEP 1: CLASSIFICATION OF MONEY AND ASSETS. We label the assets -- which we call “property” (even if it is not real estate) as either belonging to the marriage or to an individual spouse. Some assets have characteristics of both. Those are called “hybrid assets” or “hybrid property”.

Here are the most common examples of how assets are classified. Be aware, however, that different states have different ways of viewing classification. You need to consult with a professional in your state to get up-to-date legal information. The information below is applicable to my Virginia clients:
• Marital Property = Acquired during marriage (with exceptions noted in bullet points below)
• Separate (Non-marital) Property = Inheritances (whether acquired before or during the marriage)
• Separate Property = Gifts to individual spouses (whether acquired before or during the marriage)
• Separate Property = Acquired before the marriage (unless commingled with marital property, which often changes it to hybrid property, which means part marital and part separate property)
• Separate property in SOME states (including VA) = Acquired after date of separation

STEP 2: DIVISION AND DISTRIBUTION OF MONEY & ASSETS. The classification of an asset has a great deal of influence over how it is divided and distributed in a divorce. In Virginia, and other “equitable distribution” states (not the mandatory 50%/50% states, called “community property” states), the classification of an asset as “marital property” often results in a 50/50 division; but that is more a result of “legal culture” and not the law, per se.

Here are the most common examples of how assets are divided and distributed in a divorce based on their classifications:

• Marital Assets = 50/50 is the norm
• Marital Assets = In “equitable distribution” states, the division of assets can be other than 50/50. This sometimes happens when there are extreme circumstances that would make an equal distribution very unfair. Factors considered are:
1. Did one of the spouses make a far greater financial contribution to the marriage?
2. Did one of the spouses make far greater non-financial contributions to the marriage?
3. What kind of lifestyle did the couple have?
4. How old are the spouses and are they healthy in body/mind?
5. What are the circumstances that led to deterioration of the marriage?
Note: At the end of the day, bad behavior must be extreme to have an impact on the division of assets. This is particularly true if the biggest jerk makes the most money.
6. What will the tax consequences be related to various settlement options?
7. Did either spouse waste money knowing that a divorce was coming?

• Separate Assets = Unless otherwise agreed in mediation, assets which are classified as separate (belonging to only one spouse, not the marriage), stay with that spouse. They are not divided up in a divorce. That is why you must be clear on the classification of assets before you start dividing them up.

IMPORTANT: Always remember that, just because your name is on an asset DOES NOT make it yours! and … Just because you earned the money DOES NOT make it yours! Remember: Assets acquired during the marriage (by other than inheritance or gift), and money earned during the marriage, are marital assets subject to division and distribution by the court.
Always check with an attorney in your jurisdiction. This video and description include general legal principals based on Virginia law. This video and description are not intended to be legal advice and they are not intended to take the place of legal advice.

Helpful Blogs:

[mrluckybreak]

Read the info in the SHOW MORE section. Great reference with links to great blogs.

[Mia]

Watching this captivating video stirs up painful memories of the recent end of my 4 year relationship. My beloved partner chose to depart, leaving me with an unyielding ache. Despite my relentless efforts to reconcile, I find myself grappling with frustration and an inability to envision a future without him. Despite attempts to purge him from my mind, I remain haunted by his absence, feeling compelled to express my longing here.

[americanflyer]

None of this is EVER discussed prior to a marriage. No one tells you anything before the wedding. Not family, not friends, not even divorced co-workers. Everyone finds out the hard way how marriage and divorce works. Marriage is like a seriously consequential contract. You'd think at least your parents would tell you, but they don't! It's crazy!!! We all just hope for the best. Insane!!!

[amygan]

Thank you for your information. I am wondering how to divide the retirement assets like 401k, pension and social security benefits? Thank you once again!

[misuksuh]

Great information! Thank you!
How about if a couple is separated already and they are in the process of filing a divorce. Will future Retirement plan ( purchase an Annuity in near future) be affected by divorce?

[mrluckybreak]

Great video! Very informative, factual with just the right personal touch. Just goes to show how such a complicated mess divorce can be and the need to simplify it with mediation.

[stephenjjwehaha]

The capital gains considerations were very helpful for me.

[CoolcatLadyJasmine]

I spoke with Mrs. Graine over the phone, and despite us being in different states, she was incredibly helpful. She provided me with specific guidance on what to say and consider when speaking to my lawyer about my case. I am grateful for the 25 minutes she spent assisting me, and I highly recommend reaching out to her for legal advice. Thank you.

[alvinmendaros]

Best video on asset distribution, this helps a lot . Thank God I’m not married

[Dottyparson]

I called Ms Graine, very informative and very helpful.
Thank you, Ms Graine

[JessicaNiles]

Great video! I wish you were my mediator!!

[kishorilalkishoreda]

I live in Fremont, California, and I have one property which I bought before the marriage. If you can help me with my case I’m willing to pay you. I just wanted to know how much money she’s gonna get if I sell my property please let me know.

[bashiruddinahmad]

Great work very informative..in 2021 my wife an her wanted to refinance the house...the loan officer needed me to sign as a witness..i was apprehensive because i need contracts looked at..my wife was pleading with. Me so i signed..flash forward to a few weeks ago she made a comment saying that she told her brother that i signed over everything so im like a light bulb lit in my brain..i did my research im hoping i didn't sign a interspousal deed transfer..i got fooled if thats the case..we live in California..sadly her mom died in April 2022..im thinking her mom gave her the house in inheritance..my wife a teacher with pension benefits and she makes so much more than me.. divorce is coming

[venanciasandin]

Thank you for sharing this information.
How do you know how much spousal support you are entitled to?

[djbowler]

Better to take house or IRA if both are about equal amount?

[Reno-pzkt]

You same sincere and honest, the information was extremely useful. Do these points apply for Maryland residents as well

[haroldharold]

I am a military veteran and I am seeing several veterans divorcing after more than 36 years of marriage. Majority of these divorces has lead to suicides which have far exceeded the number of combat deaths. Could you elaborate on veteran divorces. What are my challenges with the Survivors Benefit Plan (SBP)? Can a judge force the vet to continue payment after a divorce? Can the judge order the spouse to maintain their retired military ID, giving them access to military installations, even though they don't meet the requirements to maintain one? How is the military retirement divided? I have been told that the spouse can not be awarded the vet's disability pay but the judge could award alimony by exploiting a loop hole that impact the vet disability pay. I am in Georgia which is not a 50/50 state.

[JohnGiraldo-ug]

What about property in a different country in which a formal prenuptial agreement was made? In Colombia called a capitalization, which is wrote into the properties deed directly. Can you tell me a little about that? Thank you

[RaymondGatt-rw]

My wife wants half the flat I bought before marriage and she is determined to get it. What advice would you give me. Thanks Ray

[KimmiePatts]

How about if my alcoholic husband inherits a home from his father then my husband puts me on the deed with him? Is it now my home too? Can I potentially acquire that home in a divorce? From Florida