Most divorces involve the separation of community property, or marital property that was obtained during the marriage and owned by both spouses. The more community property shared in a marriage, the greater the chances that the issue of dividing property can become a contentious part of your divorce.
Two inquiries will be conducted to determine how the parties will split the community property.
- First, what is “marital” and what is “separate”? Marital property generally refers to property received during the marriage, while separate property is property received before the marriage, as well as inheritances and gifts.
- Is the division equitable? Many factors go into this inquiry, such as the length of the marriage, separately owned assets, each spouse’s future financial need and earning potential, one spouse’s financial dependence on the other, any existing prenuptial agreements, and the conduct of the parties while they were married and during the divorce process.
Georgia’s Source of Funds Rule
The largest property asset that couple’s own is typically their home. Because of the various ways that home could be acquired by a couple, there are numerous permutations of how a Georgia family court can handle its division. One of the major factors in determining how this will occur is whether the house is a marital or separate asset.
As may be evident from previous posts here, if the home was owned by one party prior to the marriage and no marital income is used to pay for it at all, it will likely remain a non-marital asset and the property of the party who had previously possessed it. If, on the other hand, the home is purchased during the marriage with marital funds, its entire value will be subject to equitable distribution. However, what happens if there is a combination of the two foregoing scenarios?
When a marital home has been invested in by both marital and non-marital funds, the family court will have to determine how much of the value is marital and how much is non-marital. In Georgia, this is done by the application of a doctrine known as the “source of funds” rule. Rather than relying on the origin of the title of the property as determinate, or converting the entire property to a marital asset if any marital funds are used, a Georgia court will assign a non-marital property value to the home equal to the ratio of non-marital funds invested therein to the total amount of marital and non-marital funds involved. For example, if half of the funds invested in the home are non-marital and half are marital, 50 percent of the home’s value will be considered non-marital property and the other 50 percent marital property subject to equitable distribution by the court.
Obviously, the above is a simpler calculation than will usually be the case in such situations. The end of a marriage is an emotional time to begin with, and adding in the stress of attempting to determine the value of a marital home may just add to that burden.
A family attorney can help ensure the equitable division of property during a divorce
The family law attorneys at Banks, Stubbs & McFarland LLP safeguard your interests for the property distribution phase of your divorce settlement, which is critical in the case of high asset and complex divorces. Our firm’s reputation for skill and client commitment will work to ease the potentially painful process of ending your relationship.
We assist individuals, couples, and families in Forsyth County and surrounding areas to resolve critical divorce issues as swiftly and amicably as possible by facilitating negotiation, and if necessary, litigation in court to protect your interests. Our solutions are made to service you for years to come.
We effectively and efficiently prepare and present your case for a fair separation of property and assets, and disclosure of debts. Contact the divorce court lawyers at Banks, Stubbs & McFarland for an initial consultation to ensure that your rights are protected throughout the process.
Questions? Do You Want To Talk To A Lawyer? Contact Us.
High Asset and Complex Divorce
We know you may have mixed emotions about your impending divorce. On one hand, you will finally be free of unhappy circumstances and able to start a new chapter. On the other hand, you will have to adjust to an entirely new life and face the challenging prospect of property division.
Property division can be especially unnerving when the divorcing couple has accumulated significant assets over the course of their marriage and/or made the decision not to execute a prenuptial or postnuptial agreement. These agreements may, for example, protect funds and possessions accumulated during the marriage or preserve access to the couple’s children.
At Banks, Stubbs & McFarland LLP, we are all too aware of your financial concerns in divorce as well as child custody objectives, alimony and spousal support, and collateral issues that accompany the breakup of a marriage and family. We protect not only your economic and emotional investment in your marital relationship – we are equally dedicated to promoting “the best interest of the child” when discussing child support, custody and visitation considerations.
You may be able to minimize expenses and preserve assets through divorce negotiation and mediation. A spirit of cooperation among the parties can expedite property division outcomes and child custody arrangements intended to save assets, reduce financial burdens and maintain a productive role for both parents in a child’s life.
Cumming attorneys who handle high asset and complex divorces
Our family attorneys handle high-asset divorces necessitating the division of:
- Family businesses
- Retirement accounts (401(k)s, IRAs, pensions, etc.)
- Real estate portfolios
- Debts Inheritances
Our lawyers excel at handling every aspect of your high net worth and complex divorce, including:
- Child support
- Child custody and visitation
- Alimony and spousal support
- Business valuation
- Forensic accounting to investigate hidden assets
- Complex differentiation of premarital assets and marital assets
- Special considerations, such as inheritances, vacation and retirement homes, and real estate portfolios
- Retirement accounts requiring preparation of QDROs (Qualified Domestic Relations Orders)
The experienced high net worth divorce lawyers at Banks, Stubbs & McFarland work hard for creative, practical, lasting solutions for the separation of your assets. We will ensure that any property division is conducted in a fair and equitable manner, meaning there is a proper delineation between separate property and marital property, and that the proper values are assigned to the marital property subject to division.
Contact our Cumming law offices at 770-887-1209 or use our contact form to arrange your initial consultation with a high-asset divorce attorney.
Who gets the house when property is divided in a Georgia divorce?
Georgia follows the “equitable distribution rule,” which means that the court should split property “fairly,” but not necessarily equally. As we discussed, this can be more or less complicated, depending on what kind of assets are involved, and whether certain assets might have been contributed to with both marital and non-marital funding.
One often important asset that needs to be divided in a divorce is the marital home, if it is owned by the parties. In many cases, individuals may agree that one party may retain possession of the home, while the other is compensated in another way. If there is no agreement, however, a court may need to order the home sold and the proceeds distributed equitably, as it generally does not have the power to transfer title unilaterally. The question is, how does the court determine what an equitable division is?
If the home was purchased during the marriage and was funded by marital sources, then the court will use its discretionary powers to determine an equitable division of the proceeds. However, it is possible that one party owned the house prior to the marriage, or that non-marital assets were otherwise involved in the acquisition of the home. In this case, the court will need to determine what part of the proceeds of any home sale is marital property to be divided, and what part is separate property to be retained by the original individual who owned it.
If the house was paid for entirely before the marriage, it may be considered a non-marital asset in its entirety, though even then marital funds that went to improvements or maintenance may be in play. In many cases, however, marital funds go toward the ownership of the home itself in the form of mortgage or other loan payments. In this case, the situation can get complicated. Because Georgia follows the “source of funds” rule, the court may need to trace the amounts contributed by marital and non-marital sources to determine a ratio to use in deciding how to apportion any change in equity that occurred during the marriage.