For most people going through a divorce, this is the first time that they hear certain terms and legal phrases. Because courtroom jargon can be obscure, divorcees may feel like they don’t have full control over this big life transition.
You should never be left in the dark, especially when it comes to your personal finances. In the beginning of the process, you can become more informed with a simple crash-course of common divorce terms that can impact your finances later.
Although this term may seem obvious, it is the key to understanding how to divide property. Marital assets include property such as a shared bank account and furniture purchased during the marriage.
This is different from separate assets, which the court believes only one spouse owns independently. For example, a wife’s inheritance of fine art from her parents would not usually count as marital property. In your divorce, keep a close eye on which assets are marital because only marital assets are available for distribution.
Many Alabama residents face manageable or unmanageable debt at some point in their lives. In divorce, property and funds aren’t the only dividable assets; couples could also split debt.
Courts decide whether both spouses are responsible for the debt or if only one person should owe the full amount. Student loan debt incurred before marriage, for instance, often stays separate to each person. If the court finds that your spouse is mostly liable for your shared debt, it may allow you to pay a smaller portion.
A bank account is easy for a court to measure; its worth is equal to the dollar amount within the account. However, there are other types of property that can be unclear in terms of value. Cars are a common asset that change value quickly after purchase and fluctuate over time.
To handle this situation, a court will use an independent appraisal of the car to figure out how much it’s worth. Asset valuations can allow the court to divide as fairly as possible while knowing the estimated value that each person is receiving.
Divorce can bring a variety of changes to your life. While many of these changes are emotional, it’s important to consider the financial impact divorce may have. If you have questions about property division, please do not hesitate to seek professional guidance.