The division of marital assets and property can be one of the most stressful and contentious parts of a divorce proceeding. Our experienced divorce and business lawyers will answer all your questions and successfully guide you through the process of dividing both personal and business property in the event of a divorce. Equitable Distribution of Property When it comes to dividing the marital estate, the court will:
- Classify the assets as marital or separate;
- Value the assets;
- Divide the marital property in an equitable manner; and,
- Award alimony if necessary following the division of marital property.
Classification of Assets
The first step in division of property is for the court to classify the assets as marital or separate. In classifying assets, there exists a presumption that all assets acquired during marriage will be classified as marital assets. Marital property is property that has been acquired from the date of marriage until the ending date of marriage. Marital property is also any property value created by a specific spouse from the date of marriage until the ending fate of marriage.
Assets owned before marriage are the separate property of the spouse. Gifts and inheritance are also classified as separate assets. However, under the doctrine of commingling, separate assets that are used for family purposes may be converted to marital assets. A prenuptial agreement may also validly define separate assets that otherwise would be marital assets.
Valuation of marital assets is critical. A failure to value marital assets may be reversible error. Valuation of marital assets is based upon the fair market value of the particular asset as opposed to its liquidation value. Proving valuation can be accomplished through expert testimony, lay witness testimony or financial statements.
Specific Valuation of Assets
- Marital Home
The marital home is generally considered marital property and is rarely considered to be a separate asset or a mixed asset. However, an exception to this rule, is in short term marriages in which the non-owning spouse contributed little or nothing to the home purchase, the marital home may be classified as separate.
- Closely Owned Businesses
Valuation of closely owned businesses is difficult in equitable distribution. There are no bright line rules regarding valuation, and the Courts will look at many factors to correctly value the business including ownership before or after marriage, appreciation during marriage and spousal involvement in the business. Expert testimony is often needed to determine proper valuation.
- Life Insurance
A life insurance policy with cash surrender value can be marital or separate property. A life insurance policy will be considered marital property if payments were made with marital funds. A life insurance policy will be considered separate property if payments were made with separate funds.
- Division of Assets
After the marital property has been classified and valued the final step is the actual equitable division of assets. Unlike many states, Mississippi does not presume an equal division of property. In dividing assets the Judge is given a large amount of discretion in order to achieve a fair or equitable result. The equitable division involves only marital assets and not separate assets. . The court will have the discretion to make a fair division of marital assets after analyzing eight specific factors. These include the following:
- Substantial contribution to property accumulation with a presumption that the homemaker contribution equals that of the wage earner;
- Spousal use of specific assets;
- Market and emotional value of assets;
- Value of the separate assets;
- Tax consequences and legal liabilities to third parties;
- Can property division eliminate the need for alimony;
- Needs for each spouse; and,
- Any other equitable factors.
Modes of Division
There are a variety of ways in which the courts have effectuated division of property. The following are some of the most used methods.
- Transfer of Title
The Court can order transfer of title to one spouse from the other.
- Monetary Award
The Court can award a lump sum payment and/or installment payments in order to offset divisions that preclude a fair division of physical property.
- Sale of Assets
The Court can order assets sold and for those proceeds to be divided accordingly.
- Partition of Property
If a party wishes to partition a piece of property and if partition is feasible, the Court must partition the property as opposed to ordering its sale.
- Joint Ownership
The Court can order continued joint ownership of property especially were partition is not feasible.
Our lawyers have experience handling the most complicated divorce cases involving significant personal and business assets. To set up an initial meeting to discuss your particular situation, contact us online or call our office locally at 601-957-3101.