In any Ohio divorce, the parties must divide their marital property in a way that meets standards of fairness under state law. This is the goal of property division, which is the most time-consuming and technically difficult aspect of many divorces. But before they can begin dividing the marital property, the parties must disclose all their assets and debts. Next, they identify any separate property and take that off the chopping block, so to speak
Sorting the separate
Generally speaking, anything the parties owned individually before the marriage is separate property, and anything they acquired during the marriage is marital property, but the question can get much more complicated than that.
Certain property that the parties acquired during the marriage can actually be considered separate property. For instance:
- An inheritance bequeathed to one of the individuals
- Passive income or interest acquired by one spouse from an asset they owned before the marriage
- A gift given to one spouse during the marriage
It’s important to note that an asset that might have been considered separate property can, under some circumstances become nearly inseparable from marital property. For instance, if one spouse inherited $10,000 from a relative during the marriage, this inheritance is generally considered separate property. However, if that spouse deposited the money in a joint account with their spouse and then used that account to purchase an investment during the marriage, the investment will most likely be considered marital property.
Retirement accounts and marital property
Retirement accounts can present very complicated issues. Although the account may have been in the name of one spouse, and funded through their salary, the value it accrued during the marriage is typically considered marital property. Further complicating matters, many such accounts cannot be withdrawn without penalty until the named owner reaches retirement age. If the spouses decide to divorce before that age, these funds must be divided along with the rest of the marital property. To avoid the penalty for early withdrawal and any tax penalties, they will need to go through a somewhat complicated process.
These are just some of the issues that can come up in the early stages of property division, even before anyone starts actually dividing assets. The more complex the assets, the more difficult they are to divide. It’s crucial that people going through divorce get help from attorneys with experience in these issues.