The Division Of Property & Assets During Divorce

The following article will cover:

• The different types of debts and assets and how they are categorized.
• Kentucky state law’s approach to the process of dividing debts and assets.
• How the state views the contributions of each spouse, regardless of whether only one or both parties contribute their income to the marriage.

How Are Assets Divided When A Couple Is Divorcing In Kentucky?

When a couple decides to divorce in Kentucky, one of the toughest issues they’ll face is how to divide their properties and assets. In this state, the court plays a critical role in deciding how things are divided, and there are clear guidelines about how property should be categorized. In fact, the very first step in the division of assets is identifying what category each asset falls under: Is it non-marital property, marital property, or a mixed asset?

• Non-marital property refers to anything that one spouse owned before getting married. It can also include anything that was given to one spouse (and not to the couple as a whole) during the marriage.

Typically, non-marital property can include real estate that you purchased and paid off before you were married, gifts given to one spouse as an individual, and inheritances.

Additionally, non-marital property can include any assets that were totally acquired through the funds of preexisting non-marital property even if they were purchased after the marriage.

• Mixed assets include anything that was owned by or gifted to one person, but that was commingled as an asset to be shared by both spouses.

For example, consider that you bought a house and paid 50% of the mortgage before you got married. The value of the house up to that point would be considered your non-marital property.

However, if you continued paying the mortgage after getting married, the portion of the house's equity (value) that increased during the marriage would be categorized as marital property.

Another example would be if one spouse received an inheritance of $50,000 and used that money to invest in a marital asset, such as a piece of property. If the other spouse invested time and money in the renovation of that property as well, it would be seen as a mixed asset.

• Marital property includes nearly everything that doesn't fall under the categories above. In most cases, this covers the majority of assets in question during a divorce and nearly everything that was acquired while the couple was married.

When it comes to assets like your home, cars, or retirement accounts, the court doesn't tend to care whose name is on the title, deed, or account. What matters is whether the asset was acquired during the marriage.

Even if the house or bank account is only in one spouse's name, if it was acquired during the marriage, the court will generally view it as marital property that belongs to both spouses.

In Kentucky, marital property is divided "equitably". This doesn't necessarily mean that assets are divided into an equal 50-50 split, rather it means that courts seek to ensure that assets are divided in a manner that takes into account a range of factors, such as the financial status, needs, and overall contributions of each spouse.

Under this method, you could argue that a spouse who earned significantly more than the other shouldn’t have to split their money equally with a spouse who stayed at home with the kids. However, since the court looks at factors that extend far beyond the financial contributions that each spouse makes to the marriage, the argument wouldn’t be likely to go far.

In fact, the court often views the contributions of stay-at-home parents as being equal to the contributions of the spouse who acts as the breadwinner. Of course, these at-home contributions don’t only apply to stay-at-home parents, though.

For example, consider a situation where both spouses worked and earned similar incomes, but only one spouse takes care of household duties like cooking, laundry, and yard work. In such a case, you could argue that this spouse contributed more overall to the marriage, and therefore deserves an even greater share of the assets than 50%.

Will Assets Be Divided Differently If One Spouse Was Unfaithful Kentucky?

Kentucky is a no-fault divorce state, so “bad behavior” like infidelity doesn’t often impact how assets are divided. As long as both parties are making contributions to the partnership, that’s all that counts.

However, “bad behavior” can impact your ability to obtain a spousal support award. If your poor conduct led to the breakdown of your relationship, the court is much less likely to approve a request of that nature.

How Are Debts Divided When A Couple Is Divorcing In Kentucky?

When it comes to dividing your debts, the rules look much different than the rules regarding how to divide assets. In Kentucky, debts are generally seen as the responsibility of the person whose name is on that account. Meanwhile, if it is a joint debt, where both parties' names are on the account, the rules of fair and equitable division come into play.

However, there may be some cases in which debt that’s only in one person's name has benefited both parties or even the entire family. (For example, if one spouse uses a credit card under their name to pay for monthly utility bills, family groceries, school supplies, household appliances, etc.) In these situations, the court would be likely to divide the responsibility for that debt between both spouses in an equitable manner.

Finally, the only major exception to these rules is when there is outstanding medical debt for the couple’s children. In these cases, the court will almost always view both parents as being responsible for repaying the debt, no matter whose name is on the bill. For more information on Spousal Support In A Kentucky Divorce, an initial consultation is your next best step.