Kentucky is in the majority as an equitable distribution or common law state. This means marital property isn’t automatically assumed to be owned by both spouses and therefore should be divided equally in a divorce. The court can also divide the property if the spouses can’t agree on a property division. Property is not the only thing involved. The court will also be involved in dividing debt, cash, personal property, retirement benefits, saving, checking, and any other accounts. Some states have community property rules, but Kentucky uses a common law property settlement.
Marital Property and Separate Property
The first step in the process of dividing property is determining whether property is marital or separate. Marital property includes most assets and debts a couple acquires during marriage. Property is separate if a spouse owned it before marriage or acquired it during marriage by gift or inheritance. If your spouse spent a lot of time trading stocks in an account that was only in your name, resulting in significant gains, those gains could be marital property.
Separate Property Examples
- Property owned before marriage.
- If a spouse inherited or revived a gift of value during the marriage other than from the spouse.
- Sale during the marriage of separate property
- Property defined in a premarital agreement
- A spouse can also change separate property into marital property by changing title from individual to joint ownership of property, in which case a court would generally presume that the spouse intended to make a gift of the property to the marriage.
Marital Property Examples
- All property acquired by either spouse during the marriage (retirement accounts, money, real estate, etc.)
- Property purchased during the marriage such as real estate or automobile under a joint account
- Property that was separate property but because of the spouse has increased in value because of financial or labor driven improvements.
Marital and separate property can also be mixed together—sometimes called “commingling.” Some couples combine their separate assets intentionally; others do so simply by being careless. A premarital bank account belonging to one spouse can become marital property if the other spouse makes deposits to it; a house owned by one spouse alone can become marital property if both spouses pay the mortgage and other expenses. If the spouses aren’t able to decide what belongs to whom, the judge will have to decide whether any or all of the commingled property was a gift to the marriage or whether the original owner should be reimbursed in whole or in part. These situations can be very complicated and you will probably need a lawyer’s help in untangling things if you have a commingling issue.
Dividing the Property
Spouses can divide assets by assigning certain items to each spouse, possibly with an equalizing payment if one spouse gets substantially more than the other, or by selling property and dividing the proceeds. They can also agree to continue to own property together, for example if the children are about to graduate from high school in a few years and it makes sense to keep the family home until then, or if you have investment property that you don’t want to sell because you think it will increase in value. For most people, this isn’t an appealing choice because of the ongoing financial entanglement, but some couples choose to keep holding property together. This means marital property isn’t automatically assumed to be owned by both spouses and therefore should be divided equally in a divorce. In Kentucky, when couples divorce the assets and debts can be divided by a separation agreement. The spouses negotiate on their own, although it’s still subject to the court vetoing it or parts of it as (extremely unfair). The court can also divide the property if the spouses can’t agree on a property division. The factors considered by the judge in marital property division are…
- Each spouse’s contribution to acquiring marital property, including the contributions of a stay-at-home spouse
- Each spouse’s circumstances, including the desirability of having the custodial spouse live in the family home with the kids
- The length of marriage
- The value of the property awarded to each spouse
Dividing The Debts In Kentucky
Medical debt, credit card debt, and mortgages are only three types of debts married couples may incur. However, how these debts are divided can have a huge impact on an individual’s financial circumstances post-divorce. Having a good understanding of how debts are treated during property division in Kentucky can be one way for each spouse to ensure that the property — and debt — division process is equitable. Courts may divide debt based on several factors including…
- Debt and liability of each spouse
- The economic circumstances of each spouse
- The basis underlying the debt, whether the debt was incurred recklessly by one spouse, such as a gambling debt.
If your spouse is responsible by court order for paying a debt, a creditor may still try to come after you for payment. Protect yourself, use the court order to remove your name from the account.
We are committed to helping families resolve their differences and get back to their lives. We offer the guidance and support that you will need when you are involved with the legal system.
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About Helmer Somers Law
About Helmer Somers LawHelmer Somers Law helps individuals and businesses navigate the complex system of rules that accompany all legal situations. We are licensed to practice in both Kentucky and Ohio and offers flexible, affordable payment terms for our services. We welcome the opportunity to earn your trust and become your lawyer for life! It’s a fact of life in the modern world. There comes a time for virtually every adult American when the services of a competent, dedicated lawyer are required. Circumstances such as divorce, bankruptcy, estate planning or an income tax audit demand that your rights be protected, and your long-term interests advocated for with diligence and perseverance. When you call Helmer & Somers Law, you can rest assured that they will be.