Estimates of divorce rates in America vary, but the reality is a great many marriages reach this unfortunate conclusion, and the aftermath is frequently messy, both emotionally and financially.
When a couple joins as one, their assets typically combine to form a marital estate, and anything they acquire thereafter becomes joint property. Upon divorce, those assets — including real estate, dependent children, income, cars, furniture, stocks, and retirement accounts — get divided between the former spouses.
Depending on the state you reside in, there are two ways your assets could be divided:
1. Community property: Marital assets — and debts incurred by either spouse during the marriage — are divided 50/50. However, separate property (anything held in only one spouse’s name, including property owned before marriage, given as a gift, or inherited) is not taken into account. The states that observe this law are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Residents of Alaska can opt-in to a community property agreement.
2. Equitable distribution: Marital assets (not including separate property) are divided by a judge with the goal to put each individual on equal financial footing, taking into account each person’s earning potential or income, financial needs, and personal assets states Business Insider
