Property Classification & Equitable Division

When spouses get divorced, there are multiple approaches taken to divide their property. The approach to know best for Family Law on the UBE is equitable division of marital property. 

This approach requires two steps: first, property must be classified into marital property or separate property. Once it's been classified, the marital property is divided. Marital property is divided equitably, but separate property, generally, remains with the party who owned that property. The following is included within the classification of separate property:

~ Property owned before marriage

~ Property acquired by gift or inheritance 

~ Property acquired in exchange for other items of separate property

~ Income and appreciation of items of separate property. 

~ Awards for pain and suffering

~ Personal damages

~ Property acquired after an order of legal separation if the separation includes a final disposition of property.

Next, is to determine marital property. In a general sense, marital property is property acquired during the marriage. Some specific examples of marital property are employment benefits, stock options, and pension rights earned during the marriage even if these will not vest until after the divorce. 

Things can get a little more complicated, though. For example, if separate property is inextricably intertwined with marital property to the extent that it no longer makes sense to classify it as separate property, then it may be classified as marital property. Likewise, if separate property is improved with marital funds, that separate property, or parts of that separate property, might be re-classified as marital property. Also worth noting is that a pension plan can be both marital property and separate property. Only the portion of a pension earned during the marriage is marital property.

Once property has been classified as marital property, the next step is to equitably (though not necessarily equally) divide and distribute that marital property to the parties. Once the divorce is final, so too is this distribution; it's not modifiable. Quite a few factors are used by the court in determining how to equitably divide and distribute the marital property. Among the factors are the following:

~ The age, education, and earning capabilities of both parties

~ The duration of the marriage

~ The standard of living during the marriage 

~ The present income of both parties

~ The health of both parties

~ The assets, debts, and liabilities of both parties

~ The needs of both parties

~ Child custody provisions

~ Alimony considerations

~ The opportunities that both parties will have to acquire future income

~ The contribution that each party made to the acquisition of marital assets

~ The contribution that both parties made to the marriage (for example, as a homemaker)

~ Whether either party has dissipated marital property (in other words, an assessment of economic fault)

Knowing how to classify the property and then knowing how to distribute the property once it's been classified will put you in a good spot to earn points should these topics show up on the exam.