Most couples going through a divorce will have to deal with the issue of property and asset division. When it comes to these items, the state of Ohio is considered an equitable distribution state.
To understand divorce laws in Ohio regarding property division, you have to understand that equitable is not defined as equal, property will not be divided 50-50. For example, just because one spouse was the major breadwinner is no guarantee that he or she will get the majority of the marital property.
In community property states, both spouses have equal rights to all marital property. The state of Ohio will use equitable distribution when spouses are unable to reach an agreement on their own concerning finances and assets.
How is Marital Property Distributed?
When deciding how marital property will be distributed, the court will consider the following factors:
- the length of your marriage duration;
- each spouse's assets and liabilities;
- whether the spouse who gets custody of the marital children will need to reside in the family home;
- the liquidity of the property to be distributed;
- whether it would be economically desirable to retain an asset intact;
- any tax consequences of property division that each spouse would face;
- the costs of any assets that may need to be sold;
- any property that may have been already divided in a prior separation agreement;
- retirement benefits, but not Social Security benefits; and
- any other factors that the court may find relevant.
Determining the Value of Marital Property
Items like bank accounts, stocks and bonds and are easy assets to value, but other items—jewelry, cars, houses or antiques—can be more difficult. Appraisals from experts such as accountants and other experts is helpful, but can cost both time and money.
If one or both spouses disagree with the value provided by a marital expert, then the decision will be left up to the courts. In these cases, the court will take the evidence and testimony of these experts, as well as any paperwork pertaining to the asset and make a determination how much it is worth.
Before any marital property can be distributed, it must first be determined whether the property is, in fact, marital property. Divorce laws in Ohio stipulate that marital property can include:
- all personal and real property owned by you, your spouse, or both of you, including retirement benefits acquired during marriage;
- interest in personal or real property including retirement benefits acquired during marriage;
- appreciation and income on separate property as a result of the physical or financial contributions of one or both spouses; and
- participant accounts that are in any state or municipal deferred compensation plans, to a certain extent.
Retirement benefits—pensions, IRAs, 401k plans, deferred compensation, etc—are considered marital property and are subject to division by the court if they were acquired by either or both parties during the marriage.
What is the Definition of Separate Property?
Marital property in Ohio doesn't include separate property, which is defined by divorce laws in Ohio as:
- an inheritance that one spouse acquired during the marriage;
- personal or real property or interest in such property acquired by one spouse before the marriage or after
- a legal separation;
- personal or real property or interest in such property excluded by a legitimate prenuptial agreement;
- passive income and appreciation acquired by a spouse from separate property during the marriage;
- any compensation a spouse received for a personal injury, except for lost marital earnings and
- compensation for bills paid for with marital assets; and
- any gift given to one spouse.
Family Law courts in Ohio will assume that all assets are marital unless a person can document otherwise. The best way to prove that an asset is non-marital is through documented paperwork.
If you and your spouse are unable to agree, it will be up to the court to determine which property is marital and which is separate, and then distribute the property equitably. Sometimes it will be necessary to have an appraiser determine the value of some assets, which can be expensive and take a significant amount of time.
Are There Exceptions to Equitable Distribution?
- Financial misconduct is defined as:
- the purchase of illegal items such as drugs;
- failure to disclose or hiding assets from the court;
- loss of significant amounts of money due to gambling; and
- using money to purchase gifts or lavishly entertain a lover.
In these cases, the court may divide the assets in order to compensate the spouse that has been harmed by any of the above actions.
Thinking about a divorce? Want to protect your property and assets? Give Jack's Law Office a call at (740) 369-7567.