Types of Property in Divorce

One of the most significant and often contentious factors in divorce is the division of property – splitting items (and debt) between the two of you before you part ways. But if you understand the different types of property there are, you get clarity and may have an easier time with this daunting task.

Why different types of property matter in divorce

Before you get divorced, you will need to create a property settlement with your spouse. How you divide property in a divorce depends largely on the state laws where you live. These laws can be categorized broadly into two types: equitable distribution laws and community property laws.

Equitable distribution states

If you live in an equitable distribution state, the assets and earnings accumulated during your marriage will be divided equitably but not necessarily equally. 

In an equitable division, a 50/50 split is not guaranteed. The court will look at factors such as how long you were together, each person’s age and health status, and your standard of living before approving – or mandating – a property split.

Community property states

If you live in a community property state, it’s a little different. In your state, all assets and debts acquired during your marriage belong equally to both of you. It doesn’t matter who earned or paid for them. Property and debt are split 50/50 in a divorce.

What is marital property?

You will undoubtedly see the term “marital property” as you prepare for divorce. Marital property refers to all assets and debts you acquired during your marriage. This could include a piece of property such as your family home, vehicles, cash, savings accounts, retirement accounts., and businesses. It also includes debts like mortgages, car loans, and credit card balances.

In some states, the increase in value of separate property during a marriage may also be considered marital property.

It's important to note that marital property is not the same as community property. While all community property is marital property, not all marital property is community property. Community property is a specific type of marital property that exists in community property states, where all property acquired during the marriage is considered equally owned by both spouses.

Not sure how to divide the benefits included in your retirement plan? Read about qualified domestic relations orders, or QDROs, here.

What is sole property?

Sole property – also known as separate property, personal property, and non-marital property – refers to any asset and debt belonging to one spouse alone. 

This typically includes things that were owned by either spouse before the marriage, gifts received by one spouse alone, inheritances, and personal injury awards.

The status of sole property is usually determined at the time of acquisition. For example, if a spouse owned a house before getting married, it would generally remain their sole property after marriage, unless the house is used as the marital home or a regular vacation home. What’s more, if the other spouse contributed significantly to the upkeep or improvement of the property, it could potentially be considered marital property.

Commingled property

In some states, separate property becomes marital property if it's commingled with marital assets. For example, if one spouse inherits money and then deposits it into a joint bank account, it may lose its status as separate property and become marital property. 

Therefore, if you want to maintain the status of your separate property, it's important not to combine it with marital assets.

Who gets the house? Read our article, Common Questions about Divorce and the Marital Home.

What if we can’t agree on who gets our property?

If you and your spouse cannot agree on the division of property during a divorce, there are several options available. You could hire attorneys to negotiate on your behalf. Or, you could take the matter to court where a judge will make the decision for you. Both these options can be time-consuming, emotionally draining, and expensive.

There's another option that is often more amicable and cost-effective: mediation. 

In mediation, a neutral third party (the mediator) helps you and your spouse communicate and negotiate to reach a mutually acceptable agreement. The mediator doesn't make decisions for you. Instead, they guide the conversation and ensure it remains productive.

Mediation can help reduce conflict and preserve relationships, which is particularly important if you have kids and plan to co-parent. It also allows for more flexibility and creativity than you would probably get if a judge who doesn’t know you determined your property division.

Suggested: Who Pays Credit Card Debt in Divorce?

Uncontested divorce

The most significant advantage of mediation is that it can lead to an uncontested divorce. In this type of divorce case, both parties agree on all issues, including property division. An uncontested divorce is typically faster, less expensive, and less stressful than a contested divorce.

At Hello Divorce, we offer flat-rate mediation sessions, online divorce plans, and other services to help you get divorced with the least stress and expense possible. To learn more, 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.