How are your assets and debts divided in a Louisville divorce? Here in Kentucky, our Family Courts will refer to this as the division of “marital property.” All marital assets, property and debts are to be divided equitably between the parties. What does “equitably” mean in this context, and why is the division of marital property often a very challenging issue in a Louisville divorce?
Generally speaking, marital property includes any asset or obligation which was obtained by either party from the date of the marriage until the date of separation. There are a few exceptions to this, such as a properly structured inheritance. Any asset or debt that belonged to either party prior to the day of the wedding or after the date of separation is considered to be “separate property” and usually remains entirely the property or responsibility of the owner, and is not divided as marital property.
Marital property often includes the family home, retirement accounts and pensions, personal property, collections, rental property or a business interest.
What happens when “marital funds” are used to support or benefit a “separate” asset? For example, let’s presume the wife has a professional medical practice and owns the building where it is located here in Louisville. She already owned the building and was in practice prior to the marriage.
However, at several points during the time the couple was married the practice needed to use marital funds to pay debts or renovate or repair the building where the practice was located. These infusions of cash from the marital account was never repaid, and now the practice is doing quite well and has become a profitable and valuable asset.
When marital funds are used for the benefit of a separate asset, the property can become “commingled.” This means part of the asset is going to be considered as marital property, and part will remain the separate property of the original owner.
In the above example, the first question would be “what portion of the practice will be determined to be marital property?” The next question would be “how much is the practice worth, and what formula will be used to establish the valuation of that spouse’s interest in the practice?”
There are usually many marital assets and debts that require valuation and ultimately division during a Louisville divorce. The parties often work out their own settlement of assets and debts. If they are unable to agree upon the matter, the Judge will decide. Kentucky Family Law provides a lot of guidance for the Judge to consider in an effort to reach an equitable division.
Commingled assets are actually quite common, but really complicate the question of “how are assets and debts divided in a Louisville divorce?” This is why you need the experienced advice and counsel of the Louisville family law attorneys at Dodd & Dodd.
We invite you to review the strong recommendations of our former clients and the legal industry and contact Dodd & Dodd or call 502-584-1108 to schedule an appointment with one of our attorneys.
