Back to Basics: Substantial Assets in Divorce – Part 1
Walking in the front doors to the Tripcony May offices you will see it written on the door, “It Does Matter Whether You Win or Lose.” And while it is true that divorce is often a traumatizing life event in which no party actually wins, an area of divorce where this motto is particularly relevant is in cases involving substantial assets.
In this two part post, we will discuss property distribution and the various issues related thereto.
There are two types of property that are dealt with during a divorce. These are marital property and non-marital property. A quick look at the Arkansas Code is helpful in defining these terms.
Ark. Code Ann. § 9-12-315 (b) defines marital property as all property acquired by either spouse subsequent to the marriage except:
(1) Property acquired as a gift or by inheritance.
(2) Property acquired by the trading of property acquired prior to the marriage, as a gift, or by inheritance.
(3) Property acquired after legal separation (divorce from bed and board);
(4) Property the parties agree is not marital.
(5) The increase in value of property described above.
(6) Certain worker’s compensation, personal injury claim, or social security disability funds.
(7) Income from property described above.
Generally, each party will be entitled to keep all of their non-marital property and one-half of the marital property in the case. However, Arkansas law does not contemplate equal distribution of assets in every case before a court. In some cases, the court will make a determination of what distribution would be equitable in that individual case. Ark. Code Ann. § 9-12-315. In determining an equitable distribution of the parties’ assets, the court uses certain factors, including:
- The length of the marriage.
- Occupation of the parties.
- Age, health, and station in life of the parties.
- Amount and sources of income.
- Vocational skills.
- Estate, liabilities, and needs of each party and earning potential.
- Contributions in acquisition, preservation, or appreciation of marital property, including services as a homemaker. Id.
More importantly, the court can even determine, using the above factors, that it is not equitable to return each party’s non-marital property to them at the time of the divorce! In additions to an unequal, but equitable, distribution of assets, spousal support, or alimony, may come into play. It is easy to see how you can lose a case involving high assets if you and your attorney are not prepared to be both proactive and responsive in regards to these issues.
So you may be wondering, “What can I do to keep my (soon-to-be ex) spouse from convincing the judge that they need more than half of the marital assets, a portion of the millions of dollars or priceless family property you got from your rich Uncle Larry’s will five years before getting married, one-half the interest in your pre-marital closely held corporation, and alimony for two years so that he/she can go back to school and learn a marketable skill so they can get a job?” Or, on the other hand, you may be wondering, “How can I keep my spouse from leaving me with nothing after I have supported him/her through medical school and the building of a practice, helped raise children, and put my dreams and education on hold while doing all this?”
To begin with, you should give serious consideration to not just whether to hire an attorney, but which attorney you should hire. This is an area of law where meticulous attention to detail and powers of persuasion come in handy. The trial judge will have wide latitude in the distribution of assets and if your attorney can present a good argument based on the above statutes, your chances of drawing the short straw go down dramatically. This doesn’t mean that you will end up with a windfall, but it does prevent the other side from ending up with that windfall.
It is imperative that you provide your attorney with a list of every asset that you and your spouse own, both separately and individually. This includes real estate, personal property of value, stocks, bonds, automobiles, checking accounts, savings accounts, investment accounts, retirement accounts and pension plans (including IRAs, 401Ks, FERS, CSRS, pensions, railroad retirement, military retirement). Include in your list dates and methods of acquisition, approximate current values, and descriptions of any additions/upgrades to each asset, such as contributions to accounts or upgrades to real property, and in the case of retirement accounts, pensions, or mortgaged real estate, a list of any loans or other borrowing against the asset that has occurred. In this case, the more information you provide the better. Include everything you can think of and let your attorney decide if something is unimportant. And if you suspect your spouse has assets you are not privy to (this happens more than you would think), err on the side of caution and provide that information as well. Your attorney will then conduct discovery to make sure all assets are known and accounted for.*
The next post will discuss some particular issues, such as reclassification of pre-martial assets as marital and how courts handle the increase in value of premarital assets during the marriage.
As always, this post is not meant to be, and should not be construed to be legal advice or a replacement for the counsel of an attorney.
If you would like to schedule an appointment to meet with one of our attorneys regarding divorce, or another area of family law, please call 501-296-9999 for a free consultation.
This article was written by the Tripcony May Team.
Photo Credit: Pixabay from Pexels.com