Understanding Property Division in Divorce

Dividing property during a divorce can be one of the most challenging, and even at times emotionally charged, aspects of ending a marriage. When significant assets are involved, the process becomes even more complex.

The Role of Financial Analysis in Property Division

Finding a lawyer who understands how to analyze financial assets is a critical tool in understanding and resolving property division disputes. Proper financial analysis should involve a detailed examination of all marital assets and debts, income streams, and financial contributions made by each spouse during the marriage. The first step is to understand the assets, and value thereof. At times, this process may require an expert's input, such as a CPA to value, or appraise, ownership interest in a company or partnership.

In Kentucky, marital assets are to be "equitably distributed." This method of property division strives to provide both parties a fair share of the marital estate, taking into account factors such as the length of the marriage, each spouse’s financial and non-financial contributions to the acquisition of marital assets, the value of the property set apart to each spouse, and the economic conditions of each spouse at the time the division of property is to become effective.

Key Factors Influencing Property Division

Several factors influence how property is divided in a divorce, and each divorce presents its own unique circumstances. However, it is important to understand the fundamentals to establish realistic expectations and guide decision making.

1. Marital vs. Separate Property

   In Kentucky, marital property includes all property acquired by either spouse after the date of marriage. While, in Kentucky, separate property refers to assets owned prior to the date of marriage, or property received as a gift or through inheritance.

   
   

2. State Laws

   Property division laws vary by jurisdiction. Some states follow community property rules, where assets are split 50/50. Others use equitable distribution, which aims for a fair but not necessarily equal division. Kentucky follows the equitable distribution model as stated above.

   
   

3. Contributions of Each Spouse

   Courts in Kentucky will consider both financial contributions, like income and investments, and non-financial contributions, such as homemaking and child-rearing.

   
   

4. Economic Circumstances

   The financial needs and future earning capacity of each spouse are also important. For instance, if one spouse sacrificed career advancement to support the family, this may affect the division.

   
   

5. Debts and Liabilities

   Debts accumulated during the marriage are also assigned, which can complicate the overall property division.

   
   

How much will a divorce lawyer cost if significant assets are involved?

This is probably one of the first questions clients typically ask during a consultation. In my opinion, there is no way to predict what the final cost of your attorney's fees will be. Fees can vary widely depending on the complexity of the case, the lawyer’s experience, and the region. There are many other factors which impact fees outside of your lawyer's control, such as the other spouse's behavior, and cooperation (or lack thereof) during the process.

For high net worth individuals, legal fees can add up quickly due to the complexity of assets, negotiations involved, and whether a financial expert is needed. However, investing in a skilled lawyer can save money and stress in the long run by ensuring your interests are well protected. When you hire our firm, you are getting Sidney's direct services 100% of the time. In many larger firms, the attorney you hire may not be the attorney performing the majority of the work on your case.

Practical Steps to Prepare for Consultation

Preparation is key. If you are planning to consult with a divorce attorney, below is a list of steps you can take to being prepare:

1. Gather Financial Documents

   Collect bank statements, tax returns, mortgage documents, investment account statements, and any records of debts. The more information you are able to provide, the better advice you will likely receive.

   
   

2. Identify Assets and Debts

   Make a detailed list of all marital and separate property, including real estate, vehicles, retirement accounts, and personal belongings. Don’t forget to include debts like credit cards and loans.

   
   

3. Understand Your State’s Laws

   Research how your jurisdiction handles property division. Knowing whether your state follows community property or equitable distribution rules will help you set expectations.

   
   

4. Keep Communication Professional

   Divorce negotiations can be emotional. Try to maintain clear, respectful communication to facilitate more effective communication.

The above information is not legal advice, and the viewing of this post does not form an attorney-client relationship with any attorney at Peak Legal Advocacy, LLC. This post is for advertisement purposes.