Articles Posted in Property Division

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Today, more and more Americans are choosing to live together and even start families together without getting married. However, it’s important to understand that cohabitating and starting a life together without entering marriage denies many of the legal benefits of marriage.

Before we discuss some of the legal benefits of marriage that do not apply to cohabitating couples it’s important to understand the legal difference between the two. According to Findlaw.com, marriage is a legal union with certain requirements that vary from state to state. On the other hand, cohabitation has no formal requirements.

There are many benefits of marriage that are not bestowed among cohabitating couples, such as Social Security benefits and tax benefits, but we are going to focus on the legal benefits that apply after these relationships end in divorce.

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If you have been researching the divorce process, you have probably come across the term “uncontested divorce.” Essentially, what an uncontested divorce means is that the parties to the divorce are able to agree on all of the issues involved such as child custody, property division and alimony. Therefore, there are no issues that are contested and require court intervention.

The benefits of uncontested divorce are pretty obvious: no expensive courtroom battle; no angry fighting between the spouses; and no turning over the decision-making power to a judge.

However, divorce is a complicated and important process — whether the case is contested or not — so it’s still very important to work with an experienced family law attorney even when cases are uncontested.

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If you are like many Alabama residents, you may have a pet that you care deeply about. If divorce is on your radar, you are probably wondering how custody of your pet may be determined.

This issue has been getting a lot more attention in recent years as pets have truly become family members. However, family law courts treat pets as property, so there is no custody process in place for your dachshund like there is for your daughter.

The good news is that many judges are sensitive to the attachment people have with their pets, so more care could be applied when determining which spouse gets to keep the pet compared to which spouse gets to keep the couch.

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During a divorce in Alabama, all marital property is divided “fairly and equitably” between the two spouses.

Marital property refers to property that was brought in by either spouse during the marriage. The property can include savings accounts, retirement accounts or real property like a house. What matters is that the funds or property was acquired during the marriage.

The general rule is that all property that was owned by either spouse prior to the marriage is considered separate property and is not subject to division during divorce.

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If you are thinking about filing for divorce or you believe that a divorce may be in your future, you are probably feeling anxious and maybe a little scared about what to expect.

The good news is that you can start taking steps now to prepare yourself for the divorce and increase the chances of coming out of the marriage with a favorable settlement.

A recent article in the Wall Street Journal reported several steps to take before filing for divorce, and we are going to highlight one of the most important steps here.

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Property division tends to be a major subject in divorce. Often, Alabama spouses may find themselves wondering who gets to keep certain assets and what their liabilities are as they begin the divorce process. There are ways spouses can handle liabilities during property division to avoid future pitfalls.

One situation is if the spouses are still legally married and one spouse attempts to buy a home. This can become problematic if the spouses are still legally joined together and will require the other spouse to release their interest in that property. The other spouse can sign a quit claim deed which release them from any claims to the property. Another situation is a spouse who wants to buy another home, but is still tied up with property that was awarded to the other spouse.

Even though the divorce decree awarded the other spouse the home, they may not qualify on their own for a mortgage to get the buying spouse’s name off the house. This is also problematic since lenders view this as an item hat has not been paid off. A way out of this situation is for the other spouse to eliminate the buying spouse’s responsibility and either sell the home or refinance it. This can also positively reflect the debt-to-income ratio on credit reports.

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Baby boomers in Alabama and other states in America are getting divorced at increasing rates. Getting a divorce can be financially detrimental no matter how old a person is, but is especially a concern for those who are near retirement and are concerned about asset protection. A few tips may help a person who is considering divorce in our state to protect his or her financial future.

First, it would be wise for a divorced individual to change his or her beneficiaries on life insurance policies or retirement accounts to people other than the ex-spouse. Forgetting to do this means that a large sum of money may end up going to one’s ex against one’s true wishes. Even if another person is listed in a will, a beneficiary designation trumps the will.

In addition, if a divorced individual is considering getting married again, it’s wise to talk about the new couple’s financial goals. This is important because the two individuals may have individual assets that they want to go to their separate children. In addition, if one person has extensive debt, the other party would benefit from knowing this information. It may also help to look at one another’s credit report before getting hitched; after all, finances are one of the biggest reasons for divorces.

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Birmingham area residents may have heard that the divorce rate decreased during the recession. Many people attributed this to marriages growing stronger during tough times. A new study challenges that thinking.

A university sociologist has found that between the years of 2009 and 2011, about 150,000 couples stayed married simply because they could not afford to divorce. Dividing property and potentially facing alimony and child support orders was just too much for many to bear when the economy was faring so poorly, according to this research.

These findings do seem to mirror the divorce trends that took place during the Great Depression. The divorce rate dropped by about 25 percent from 1929 to 1933, but it then rose throughout the 1930s and the 1940s. This led social scientists to infer that a struggling economy does not prevent divorces; it only keeps them at bay for awhile.

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The most difficult part of many divorces in Alabama is the property division process. Splitting one household into two is no easy task. In addition to dealing with investments, the marital home, and various household items, it is necessary to divide retirement assets during divorce. This can be quite complicated because many married couples save for retirement as a team; a retirement account that was designed to finance a married couple’s retirement will likely not stretch quite as far for two separate retirements. 

Retirement assets are incredibly important to many Alabama residents, and it is important that they protect these assets during divorce and ensure that they are divided fairly.

When dividing 401(k) accounts, pensions and other investments, it is critical to consider the tax implications. For example, if an IRA is to be transferred as part of a divorce settlement, this needs to be done in a certain way to avoid a damaging tax impact. Directly transferring assets from one IRA account into another IRA account should not incur taxes, as long as the transfer is required by the divorce settlement, but other types of transfers may be taxable.

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There are few things more beloved for Alabama residents than the family pet. Whether it is a dog, cat or something more exotic, pets can quickly become a member of the family. Indeed, many individuals consider their pet to be almost like another child.

Despite these feelings equating a pet to a child, the law is not so clear on how to treat the family pet in the event the couple gets a divorce. Different courts have addressed the “custody” of the pet in different ways, with some analogizing it to child custody, and others considering it a matter of property division.

How courts approach the issue may well determine who gets to keep the pet. For instance, an Alabama judge on one occasion awarded custody of a family dog to one spouse after indicating it was in the dog’s best interest. This approach would be similar to how courts view child custody, which looks at what is in the best interests of the child. The court might look at issues such as who spent more time with the pet, who cared for it most and who provided for the pet’s needs.