What Are the Steps for Dividing Property in a Divorce?

Dividing property between yourself and your soon-to-be ex can be complex and emotional. It's not just the tangible assets; it’s also the division of your sentimental items that makes this process difficult.

Do we have to divide everything 50/50?

Many people assume everything will be split down the middle in divorce, but this is not always the case. Divorce laws vary from state to state, and the division of assets depends largely on whether you live in a community property state or an equitable distribution state.

Community property states

In community property states, all marital assets and debts acquired during the marriage are considered to be equally owned by both spouses. This means they are divided 50/50 in a divorce. But these states are in the minority. (California is the largest of them.)

Note that gifts and inheritances received by one spouse are usually exempt from the 50/50 rule.

Equitable division states

Most states follow the principle of equitable distribution. Marital property is not automatically divided 50/50. Instead, the court divides them in a manner that it deems fair or equitable. 

What makes a property division “fair” in these states? Factors considered may include each person’s income and earning potential, the length of the marriage, and the standard of living a couple established together.

While both systems aim for a fair division of property, the approaches differ significantly. In community property states, fairness is achieved by an equal split regardless of individual circumstances. Equitable distribution states focus on a subjective idea of what's fair, which may not result in an equal split.

In both systems, however, the court will only divide marital property – that is, assets and debts acquired during the marriage. The court will not divide other types of property owned, such as gifts or inheritances received by one spouse. These are generally considered separate property and not subject to division.

Steps for dividing property during divorce

Step 1: Identify marital property

Generally, marital property encompasses all assets and debts acquired during the marriage. This could include the marital home, vacation home or other real estate, cars, furniture, savings accounts, retirement benefits, and even debts. You'll need to make a comprehensive list of these items.

Remember that not everything is considered marital property. For instance, items one spouse owned before the marriage and personal gifts and inheritances received by one spouse during the marriage are usually considered separate property.

The determination of property division is different from the determination of whether spousal support/alimony will be paid. Learn more about alimony here.

Step 2: Determine the value of the property

Now, it’s time to determine the value of your marital estate. This might sound straightforward, but it can get complicated when dealing with assets like retirement accounts, businesses, and properties that fluctuate in value over time.

For tangible assets like homes or cars, you may need to hire an appraiser. For financial assets, you might need to consult with a financial advisor or accountant. 

And remember, you're not just appraising your assets; you also need to determine the amount of your shared debts so this can be split.

Need help figuring out what to do with your family home? We can help. Check out our free Home Equity Buyout Calculator.

Step 3: Divide property and transfer ownership

The next step is to divide your marital property. In community property states, assets are typically divided equally. In equitable distribution states, assets are divided based on what the court considers fair.

Before you submit your property division proposal to the court, consider each person’s financial situation, earning potential, contributions to the marriage (monetary and non-monetary), and the needs of any children involved.

What about marital debts? Read our article, Who Pays Credit Card Debt in Divorce?

Once you agree on a division of property and your overall divorce settlement, the divorce process can move forward. Document your agreement, and prepare to have a judge review it. The judge must sign off on the agreement before you can begin the process of transferring ownership. This may involve tasks like changing names on deeds, splitting bank accounts, or signing over vehicle titles.

Whether you’re unsure what to do with a single piece of property or don’t know how to handle your entire divorce case, we can help. Hello Divorce offers a la carte legal advice sessions along with online divorce plans. Click here to schedule a free 15-minute phone call.

Divorce Content Specialist & Lawyer
Divorce Strategy, Divorce Process, Legal Insights

Bryan is a non-practicing lawyer, HR consultant, and legal content writer. With nearly 20 years of experience in the legal field, he has a deep understanding of family and employment laws. His goal is to provide readers with clear and accessible information about the law, and to help people succeed by providing them with the knowledge and tools they need to navigate the legal landscape. Bryan lives in Orlando, Florida.