“I know grass grows on it! Is this what my lawyer means by our ‘Marital Property’ in Divorce?”
For readers of our blog posts, you probably have a pretty good idea that divorce law has a lot of flexibility and ambiguity–and suspect this is a trick question. You are right. The answer is clearly “Yes”, but also and equally “No”. Dixon & Moseley, P.C. attorneys frequent field (no pun intended) questions along the lines of “What is Marital Property?”
The answer is important indeed. Under divorce law, property brought into the marriage, acquired during the marriage, and/or before final separation of the parties is “marital property”. Under the one-pot theory (all such property goes into the marital pot or divorce estate), the trial court presumes an equal division of the marital property, unless rebutted by the evidence (a different concept outside this blog post).
So to potentially obtain half of the marital property on divorce, it is important to know what constitutes “property” in order to present the evidence to the trial court. It is very difficult to correct a situation where marital property is not identified in the evidence as subject to division.
If this blog post does the trick, you should have a good idea about what is included in the term property (which is marital if brought into the marriage, acquired during the marriage, or acquired before final separation) and what is meant by the term in the legal system in a few more paragraphs.
At the basic level, almost everyone understands that property is dirt, rocks, and what grows in and upon it. This is termed “real property.” An example in the divorce scenario might be a parcel of property (i.e. a lot of land) the parties purchased during the marriage to build their retirement home upon.
The term real property is further defined by whether something man-made is constructed upon it. If this is the case, it is “improved” real property. The most obvious example is the marital residence. It is a home built upon real property, and once build this real property is characterized or classified as improved real property.
The concept of “marital property” includes much more however. When it becomes cloudy and somewhat difficult to understand, for non-lawyers in particular, is where it involves the rest: tangible and intangible “things.” An example of a tangible thing, which is also referred to sometimes as personality or personal property would be the contents of the marital home, ranging from pots and pans to pets.
Intangible things are best thought of in abstract terms. A brokerage account with a certain number of equities may be an example in your situation. Gone are the days of paper stock certificates issued for ownership in companies. Instead, your stock is relegated to the electronic and cyber world. Nevertheless, they are intangible personal property.
So far so good? Now it gets a little trickier. Property is real and personal, intangible and/or mixed. But no matter what the composition is of the marital property in the marital estate, subject to a presumed equal division, there is another legal concept or refinement to make and understand. The property may be encumbered or subject to an offset.
This gets into the gross versus net marital estate. A gross marital estate is all marital property. However, the net marital estate or property that can actually be divided between the parties is what is left after debts. The marital residence provides a ready example. If this is the only property, and has a value of $200,000 (the home is sold at that time), this is the gross marital estate.
This must be subtracted from encumbrances, such as the mortgage and taxes. If these equal $100,000, then this is subtracted from the gross marital estate, which as noted in this example is $200,000. The net marital estate from all this marital property is $100,000, which if presumptively divide would have each party receiving a check for $50,000.00 from the bank as ordered by the trial court in effectuating an equal division.
If you now understand all of the tangible and intangible things that make up property, you have begun to form a foundation to be an educated legal consumer in a divorce case. Dixon & Moseley, P.C. attorneys are strong believers that the more accurate and complete information a litigant possesses about the legal matter they face, the better job they can do in articulating to counsel the legal objectives.
We hope this helps. This blog post was written by Bryan L. Ciyou, an attorney with Dixon & Moseley, P.C. Dixon & Moseley, P.C. handles cases throughout the State of Indiana.