What Happens to My Assets if I End Up Divorcing?

If you don't have a prenup in place and you end up divorcing, the division of assets and liabilities will typically be determined according to the laws of the state where you lived. The division will be determined by either equitable distribution or community property rules, depending on the state's laws. 

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• Equitable Distribution States: In states that follow equitable distribution laws, assets and debts acquired during the marriage are typically divided fairly but not necessarily equally between spouses. New York, Florida, and Massachusetts are all examples of equitable distribution states. The court will consider various factors, including the length of the marriage, each spouse's financial contributions, earning potential, and needs, as well as any non-financial contributions to the marriage including but not limited to career sacrifices, homemaking and childcare, and emotional or educational support. Equitable distribution aims to achieve a fair and just outcome based on the specific circumstances of each case.

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• Community Property States: In community property states, assets and debts acquired during the marriage are generally considered joint property and are typically divided equally between spouses upon divorce. Community property states include California, Arizona, Texas, and others. Separate property, which includes assets acquired before the marriage or gifts and inheritances received by one spouse during the marriage, typically remains with the individual who owns it. However, similarly to equitable distribution states, the court may still consider various factors to ensure a fair and just distribution of assets and debts on a case-by-case basis. 

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“No fault divorce” is currently available in every US state – “no fault” meaning neither party has to prove that the other party was at fault for the breakdown of the marriage in order to be granted a divorce. However, some states allow for filing a fault-based divorce as an option; in these states, such as New York, establishing fault can mean that the spouse filing for divorce is granted spousal support or a larger portion of the marital property. 

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Without a prenup, the division of assets and liabilities are subject to negotiation between you and your spouse or determined by a judge if you cannot reach an agreement. This is where lawyers come in and can end up costing some couples a lot of the assets they’re negotiating over. Additionally, leaving the division of assets up to the discretion of a court may cause intense emotional distress and can even lead to unfavorable outcomes for both you and your partner. 

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A prenup helps provide a level of certainty and control over asset division and it is why nearly all family law attorneys that have witnessed countless divorce proceedings highly recommend all couples to get one before getting married. 

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Sources:

https://hekmatfamilylaw.com/prenups/divorcing-without-a-prenup-dont-do-it/

https://www.nikitranesq.com/blog/prenups-and-no-fault-divorce-in-california-what-you-need-to-know

https://www.familylawattorney-irvine.com/blog/2019/september/what-is-the-difference-between-community-propert/#:~:text=In%20California%2C%20each%20spouse%20is,split%20the%20parties%27%20marital%20assets.

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