Who Gets What? Dividing Property in Arkansas During a Divorce
“I’m goin’ through the big D,
And don’t mean Dallas
I can’t believe what the Judge had to tell us
I got the Jeep, she got the palace”
Dividing Property in Arkansas in a Divorce
The above lyrics from Mark Chesnutt’s “Goin’ Through the Big D” always makes me smile a bit but it may not be so funny to those couples going through a divorce whom are faced with dividing property with their soon to be ex-spouse.
Where to begin?
Arkansas law requires a fair division, which usually means equal—but a Court that believes that a precisely equal division would be unfair can divide the property in a different share after considering the following factors:
- length of the marriage
- each party’s age, health, and station in life
- each party’s occupation
- each party’s sources of income, and how much income is available
- vocational skills
- employability
- estate, debts, and needs of each spouse and each spouse’s opportunity for further acquisition of assets and income
- each spouse’s contributions to the acquisition, preservation, or appreciation of marital property, including services as a homemaker, and
- federal income tax consequences of the property division.
Some couples are able to agree on how to divide everything on their own, while others need the help of an experienced divorce lawyer to help figure everything out. Couples who do not manage to resolve property issues outside of court (very possible since they may not be getting along anyways) will end up going to court to ask for a decision from the Court (Well…we’ll just go let the Judge decide!)
Marital Property and Separate Property
The first step in the division process is deciding whether property is marital or separate. (What’s mine is mine and what’s yours is mine, right?) Marital property includes most assets and debts a couple obtains during the marriage. Property is separate if a spouse owned it before marriage or acquired it during marriage by gift or inheritance. For reference, separate property also includes:
- items bought with or traded for separate property
- earnings on separate property
- any increase in value of separate property, and
- disability benefits or funds one spouse receives from a personal injury claim, if they are for permanent disability or future medical expenses.
A spouse can convert separate property into marital property by changing title from individual to joint ownership (a deed for property), in which case a judge would assume that the spouse intended to make a “gift” of the property to the marriage (no take backs!). Marital and separate property can also be mixed together—often referred to as “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 couple cannot agree on what belongs to whom, the Court 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 difficult and may require the assistance of an attorney or a special financial professional.
Separate property is not ordinarily subject to division in divorce, but a judge in Arkansas does have the option of including it if it seems unfair not to after applying the factors listed above. A judge who divides marital property in any way other than equally, or who includes separate property in the division, must explain the reasons for doing so in the court record.
Dividing the Property
Spouses can divide assets by assigning certain items to each spouse, possibly with an equalizing payment if one spouse gets more than the other, or by selling property and dividing the proceeds. They can also agree to continue to own property together—this isn’t a very attractive option for many people, as it requires a continued relationship, but some couples agree to keep the family home until children are out of school. Others may keep investment property in hopes it will increase in value.
The couple must also assign all debt accrued during the marriage, including mortgages, car loans, and credit card debts, to one of the spouses.
Questions about property division? Give John S. Stobaugh a call today.
*Disclaimer: This post contains basic information and in no way constitutes actual legal advice or establishes an attorney-client relationship with any individual reading this article.