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Divorcing by Division Splitting of assets, property and debt can be challenging

By May 3, 2017November 29th, 2017Divorce

By Samantha Hammond

When a marriage goes bad, there are custody agreements for children and even pets. But what about all the stuff that’s acquired over the course of the marriage? Who gets the house? The car? The debt? What about the kitchen blender you both love or the awesome big screen TV neither person wants to part with?

“Figuring out who gets the house, or how the 401K is divided is one thing, but Judges don’t want to be presiding over who gets a bag of sand” said John George, a family law attorney and partner at the Coeur d’Alene firm of Palmer George & Taylor. “Hopefully, the two parties are able to mutually agree on the division of the smaller personal property itmes before we get to court. If not, the judge can simply order that it be sold and the proceeds divided.”

Idaho is a community property state. Assets, property and devt acquired during the marriage are typically divided equally. But who gets what, and at what value, is the tricky part. Although the courts prefer to preserve property whenever possible, by dividing and awarding it between the spouses evenly, it can be difficult to do when the parties disagree on what an item is worth, or who gets it. In divorce, emotions often run hot and people dig in for a fight, seeking vengeance for some preceived wrong. Getting them to aggree on even insignificant items of property can be difficult, George Said. That’s when things may be order sold.

“People fight over small things and eventually they come to realize how much time and money it is costing them,” he said. “A blender or toaster might only be worth $5 and when you’re talking attorney fees and other litigation costs, it doesn’t make a lot of sense.”

Dividing everything equitably requires patience through negotiation and calm compromise. There is no one-size-fits-all solution, George said.

“There are times the custody arrangement of the children will help the judge determine who gets the house,” he said. “The judge is always going to be looking at what’s in the best interest of the children and it may not make a lot of sense to have them move out of the family home, if the spouse who is awarded primary custody of the children wants the house, and can afford to keep it. If so, that spouse will need to buy out the other spouse’s one half equity interest in the home, or the other spouse may be awarded additional items of property as an offset to equalize them – like additional retirement assets, or additional items of real property.”

The idea is that each spouse should receive approximately equal amounts of property and debt at the bottom of the balance sheet, as an equitable division, George said. However, the division of debts is often challenging for people to understand. People tend to think that just because a debt is in the name of one spouse that it is a separate debt of that spouse. This is not necessarily true, said George. A debt is considered to be equally owing by each spouse, even if it is individually held in the name of one spouse, as long as it was acquired during marriage and serves a “community purpose.” A community purpose can be just about anything, according to George. “If the debt was incurred during marriage, it is probably a community debt.”

To complicate things further, a court ruling in a divorce that one party pay a particular debt doesn’t mean the other spouse is off the hook with the creditor. “If one spouse is ordered to pay a debt that was acquired during marriage in the name of the other spouse, and the spouse that was ordered to pay then fails to pay, the creditor can seek collection from the other spouse. The remedy is to go back later and sue the other spouse or ask the court to find the non-paying spouse in contempt of the court order.”

What can people do to protect themselves from losing their stuff?

“Often one partner will leave the marital home, before either spouse has filed for divorce. Before they leave, they may want to take pictures of things and document everything with a date-stamped image,” he said. “I have seen cases where one spouse is claiming the other spouse sold everything or threw their things away, and the other spouse denies it. Without proof, it’s very difficult to prove the property even existed, or that it was disposed of improperly.”

What about asking for the wedding ring back? Besides being in poor taste, courts generally consider engagement and wedding rings gifts and not subject to division, said George.

Gifts from the in-laws are dicey too. Because gifts in general are considered separate property, and not subject to division, one spouse will often claim that an item was gifted to them during marriage, individually, rather than gifted to both spouses as a couple. Unless there is documentation regarding a gift and who the intended recipient is, the judge can rule that it was given to the couple, depending on the evidence presented regarding the issue.

According to George, “If it was acquired during marriage, whether it be property or debt, the presumption is that it belongs to the community and is subject to division. The burden is upon the party claiming it is separate property or separate debt to prove otherwise.”

For more information: Contact John George at (208) 665-5778.

–Written by Marc Stewart is Director of Sponsored Content for the Coeur d’Alene Press. He can be reached at [email protected] or 208-664-8176, ext. 2011.

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