How Title Affects Property in a Divorce

Assume Nothing.

Many people assume valuable pieces of property such as a car, home or bank account that are titled in their name (and their name only), that they’ll get to keep it during a divorce. But that is not a safe assumption. Divorce judges looks at various factors in determining which assets will be considered part of the marital estate and divided between spouses accordingly.

Location. Location. Location.

The state your divorcing in does make a difference in what and how much you might get. For example, if you’re divorcing in an “equitable distribution” state (which is the majority of states), courts divide property by looking at several factors such as:

  • The length of the marriage
  • Each spouse’s needs going forward
  • Financial contributions each spouse made to the marriage

The goal of these factors is to come up with a fair split.

War of the Roses

How does a judge determine what assets (including those titled in only one person’s name) are subject to division? Generally, the judge considers when the asset was obtained. For example, if an asset is acquired during the marriage, it will likely be part of the marital estate regardless of who holds title. This is particularly true if it was acquired with marital funds. However, if your spouse brought a particular asset into the marriage, he/she will likely keep get to keep it. Of course, the same applies to you. If you brought a particular asset into the marriage, then you’ll be more likely to keep it after the divorce.

In “community property” states, property that either spouse acquires during the marriage becomes a marital asset. This means that each spouse owns a 50-percent share. Keep in mind, the “50-percent rule” usually doesn’t apply to gifts and inheritances that specifically go to one spouse. So if you receive a large (or small) cash inheritance during the course of your marriage from a grandparent, you will more than likely get to keep that in the divorce. It also means that if you’re married and buy a house, your spouse will own half, even if you are the only one with a name on the deed. Therefore, if you keep the house, your spouse will be compensated with other assets. Likewise, if the house is sold, your spouse will likely get half the proceeds.

Conclusion and Resources

Of course, this example is just the tip of the iceberg. The unique laws of each state and the complexities of each couple’s situation can complicate things. If you have questions, talk to an attorney estate planning lawyer near you. To help you get ready, read our blog: Preparing for an Estate Planning Meeting.

And check out this map showing community property states.