Posted on: 25 August 2023
When going through a divorce or separation, navigating the complex financial aspects can be overwhelming. One of the key areas in family law is understanding how assets are divided and determining spousal support. Here are some important financial considerations in family law.
Understanding Asset Division:
Determining Marital Property: In most jurisdictions, marital property refers to assets acquired during the marriage. This includes real estate, vehicles, investments, bank accounts, retirement funds, and personal possessions. It's vital to identify all marital property as it will be subject to division.
Equitable Distribution vs. Community Property: Jurisdictions follow equitable distribution or community property principles when dividing assets.
- Equitable Distribution: In jurisdictions that follow equitable distribution, assets are divided fairly but not equally. The duration of the marriage, the individual contributions of each spouse, and their potential for future earnings are all factors considered.
- Community Property: Community property states divide marital assets equally between spouses. Each spouse receives an equal distribution of the community property accumulated during the course of their partnership.
Valuation of Assets: To ensure a fair division of assets, it's crucial to value them accurately. Complex assets, such as businesses or investments, might require professional appraisals to determine their worth. Valuation experts can provide objective assessments to ensure an equitable distribution of assets.
Types of Spousal Support: Spousal support, also known as alimony or maintenance, is the financial assistance one spouse provides to the other. Here are the different types of spousal support:
- Temporary Support: This is awarded during the divorce process to help the financially dependent spouse maintain their standard of living until a final settlement is reached.
- Rehabilitative Support: This is designed to assist the recipient spouse in acquiring the necessary skills or education to become self-supporting within a reasonable timeframe.
- Permanent Support: This is granted when the receiving spouse faces challenges hindering their ability to attain financial independence. These obstacles may stem from age, health, or long-term dependency.
- Lump-Sum Support: This is a one-time, fixed payment instead of ongoing payments. This option might be chosen when the paying spouse prefers to settle their support obligation upfront.
Factors Considered for Spousal Support: Courts consider various factors that vary by jurisdiction when determining spousal support. Some common factors include:
- Duration of the marriage
- Age and health of both spouses
- Earning capacity and income of each spouse
- Quality of life during the marriage
- Contributions to the marriage, including child-rearing and homemaking.
Modification and Termination of Spousal Support: Under certain circumstances, modifying or terminating these orders is possible. Common reasons for modification include changes in income, employment status, or cohabitation of the receiving spouse. Termination often occurs upon the death of either spouse or if the receiving spouse remarries.
Contact a family law firm to learn more.Share