- June 23, 2023
- Kelvin Birk
- Divorce
Missouri is an equitable distribution state, which means that your assets, as well as your property and debts, will be divided in what the court considers a fair and equitable manner. This may not be equally, however, because there are many issues to consider when determining what is equitable. If you or a loved one is facing a divorce and worried about how your assets will be divided, an experienced family law attorney can help clarify the issues and fight for the best settlement possible.
How Are Assets Divided in a Divorce in Missouri?
Depending on your individual situation, there are many assets that may need to be valued and divided in a divorce, including:
- Family homes, timeshares or vacation homes and their furnishings
- Bank accounts, stocks, bonds, and securities
- Mutual funds, brokerage accounts, and other investments
- Vehicles – cars, boats, planes, recreational vehicles
- Military and retirement pensions
- Professional degrees
- Insurance policies
- Businesses
- Pets and other animals
- Jewelry, antiques and collections.
There are several factors that determine how assets are divided. According to Missouri domestic relations law (section 452.330), the first consideration is whether your assets, property, and debts are categorized as marital or separate.
Marital assets, property, and debts are subject to equitable distribution. These are assets acquired during the marriage, unless excluded as indicated below.
Separate or sole assets, property and debt are those that were acquired during the marriage by either party through gift or inheritance, acquired by a spouse after legal separation, or excluded by a pre- or postnuptial agreement. The increase in value of property acquired prior to the marriage may also be considered separate property. Separate assets belong to that spouse and are not subject to equitable distribution, except for gifts between spouses.
The situation is more complicated when assets have been commingled in some manner. Missouri law states that property which would otherwise be nonmarital property shall not become marital property solely because it may have become commingled with marital property.
In addition, in determining equitable distribution of property, Missouri courts consider factors that include:
- The economic circumstances of each spouse at the time of the division of property, including the importance of allowing the spouse with residential custody of children to remain in the family home
- The contribution of each spouse to the acquisition of marital property, including the contribution of a spouse as homemaker
- The value of the nonmarital property each spouse retains
- The conduct of the parties during the marriage
- Living arrangements for minor children.
How to Separate Assets and Debts in a Divorce
After the court has considered factors relevant to equitable distribution, the court must then award each spouse their non-marital property and begin dividing the marital property, assets and debts.
In doing so, the courts do not consider who owns legal title to a particular item of property, which spouse actually purchased the property, or whether it is jointly titled or owned. As long as the property is not separate or excluded and has been acquired at some point during the marriage, the property is considered marital and will be divided in a “fair and equitable” manner.
To divide assets or debts, the court must determine the value of the “marital estate” by adding up the value of all marital assets and property, subtracting the total of marital debt, and use this amount for the basis of the property division. Instead of dividing every item, the court determines what dollar value each spouse should receive and then awards sufficient assets and property to each spouse to equal that value. In some cases, one spouse will have to make a cash payment to the other to make the division equitable.
How Are Marital Property and Debt Divided in Missouri?
There are numerous special situations that can complicate matters when dividing marital property and debt.
When dividing debts, Missouri courts will consider all relevant factors. Debt division is between spouses and has no bearing on creditors, who can still attempt to collect from the spouse who signed the loan or credit card agreement. In some cases, one spouse may have to take the other to family court if legally required to pay a debt that was ordered to be paid by the other spouse.
When dividing marital property, special considerations need to be made for:
Division of the marital home and other real estate. The courts may award the marital home to one spouse, permanently or temporarily, or order it to be sold and the amount of the proceeds divided. In determining the value of real estate, the courts will consider the current market value of the real estate minus the debts, such as mortgages, liens, and home equity lines of credit.
In some cases, a spouse who wishes to keep a property will have to buy out the share the other spouse has in the property, either by paying its value directly or by giving up another asset of equal value.
Transferring title can be made by quitclaim deed. Transferring the mortgage may require that the mortgage be refinanced, assumed, or another arrangement made directly with the loan holder.
Division of vehicles. The division of vehicles also involves equity — the value of the vehicle minus the amount of the loan. Transfer of title can be made by signing an affidavit of gift to remove a spouse’s name from the title. If there is a loan on the vehicle, the debt will also have to be refinanced, assumed, or another arrangement made with the creditor directly.
Division of household goods. It can be difficult to accurately value household goods and furnishings, so these are usually divided by agreement between the spouses, unless there is an item of high value involved. If the parties cannot agree, the court will divide these items.
Division of retirement accounts and pensions. Pensions and retirement accounts will be divided, whether or not the account is owned by one spouse. These are considered to be marital property, as long as the value was added or acquired during the marriage.
The division of a retirement account may involve a Qualified Domestic Relations Order (QDRO). This is a separate order from the divorce decree that directs the administrator of the retirement account to divide it according to the court’s order. The spouse receiving the account will get an account that is identical to the account that was divided at the value assigned by the court. A faster, less expensive option to dividing retirement accounts is to allow one spouse to keep the retirement account and the other spouse to receive another marital asset in exchange.
Division of jewelry and wedding rings. Wedding rings and other jewelry given as a gifts during the marriage, such as anniversary or birthday gifts, are generally considered to belong to the spouse that received it and are therefore non-marital property.
Get Help Dividing Assets from a Missouri Divorce Lawyer
Dividing assets in divorce can be confusing and extremely stressful. While the courts strive to make division as equitable as possible, everyone’s situation is different, and making mistakes can negatively impact your future and that of your family.
For more information regarding property, asset, and debt division in divorce and to have questions answered for your individual divorce situation, call Cape Girardeau, MO, divorce lawyer Kelvin Birk for help.
The Birk Law Firm is a small firm by choice that is big on client services. Our clients benefit from the intertwining of Kelvin Birk’s legal and CPA backgrounds and experience, and we provide well-rounded advice to solve both legal and financial issues and come up with creative solutions for all family law issues.
We offer a free consultation to evaluate your individual situation and show you what we can do to help. Call us today at 573-332-8585 to get started.
Attorney Kelvin Birk
Kelvin Birk is a lawyer as well as a certified public accountant, with more than 30 years of experience in accounting and tax and business consulting, and more than 20 years of experience in numerous legal matters. This combined expertise allows our law firm to provide a level of service above that of other firms. Whatever your legal situation, your attorney at Birk Law Firm can counsel you as to the tax implications. We have experience in providing myriad legal representation services to residents of southeast Missouri and other areas.. [ Attorney Bio ]
