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Are Assets and Debts Acquired During the Divorce Case Marital?

By Brenda L. Storey, Esq.

A common question of parties going through a divorce is whether an asset they buy, or a debt the other party incurs, after the divorce case is filed, is marital.  The simple answer is yes.  Our statute defines the marital estate as being through entry of the decree of dissolution of marriage.

Of course there is also the complicated answer.  Just because an asset or debt is marital does not mean that it must be divided with the other spouse.   Our courts are required to equitably divide the marital estate.   If a spouse incurs debt for his/her living expenses while the case is pending, an argument can be made that it is equitable for that debt to be just his/hers.   If a spouse in sued for an accident that he/she caused, which occurred while the divorce case is pending, it can be argued that it is not equitable for the non-involved spouse to suffer any financial hit as a result.  If a party charges his/her attorney fees and costs onto a credit card, and carries the balance, the argument is that that is not debt, but fees and costs that are addressed by a whole different statute.  If a spouse receives a merit award, that can be treated as income for maintenance and child support calculation, or can be treated as property for equitable division.  If the latter, arguments can be made, if the facts support, that such was for staying with the company in the future, so not for efforts during the marriage, or that it would be inequitable for the parties to share what was earned solely by one spouse’s hard work during the separation.  If one party trades a car in for a newer one, the new one is marital, as is the financing.  Argument can be made by the other, though, that the higher net equity of the two cars should be considered when equitably dividing the marital estate, even though one is now gone   Depending on the facts, various arguments can be made about equitable division of the marital estate contents.  The arguments do not change the simple answer that an asset acquired or a debt incurred prior to the decree entering is marital.

Now, the small print—there is an automatic injunction that goes into effect against the Petitioner upon signing the Petition and against the Respondent upon service.  The Injunction, as relevant, restrains a party from transferring, encumbering, concealing, or in any way disposing, without the consent of the other party or an order of the court, of any marital property, except in the usual course of business or for the necessities of life, and requiring each party to notify the other party of any proposed extraordinary expenditures and to account to the court for all extraordinary expenditures made after the injunction is in effect.   Thus, extraordinary purchases that lead to a new asset or increased debt should not be common while a case is pending.