When dividing property in a divorce, several factors must be taken into account, including: (1) professional licenses or degrees; (2) pension benefits; (3) personal injury settlements; (4) marital debts; (5) goodwill; (6) future interests; (7) tax implications; and (8) alimony or spousal support.
Professional Licenses or Degrees: While professional licenses or degrees themselves are not considered marital property, the court may award compensation for any financial contributions made by one spouse toward the other’s education or training. This reimbursement is limited to the actual financial support provided (such as tuition or other related expenses) and does not entitle the contributing spouse to a share of the degree’s value.
Pension Benefits: Any pension or retirement benefits accumulated during the marriage, including 401(k) plans and profit-sharing plans, are deemed marital property and are subject to division, even if only one spouse contributed to the pension.
Personal Injury Proceeds: Personal injury settlements are considered marital property if the injury occurred during the marriage and before the final separation.
Marital Debts: Debts can be classified as either marital or separate. If the debt was incurred during the marriage, it is generally considered marital debt. The court will assess factors such as:
- The purpose of the debt;
- Who incurred the debt;
- Who benefited from the debt;
- Who is most capable of repaying it.
Goodwill: The goodwill of a professional practice or business, including its reputation and client base, is regarded as marital property if it can be quantified financially.
Future Interests: A potential future interest in property is not subject to distribution during a divorce.
Tax Implications: Payments for equitable distribution or property transfers are not taxable when made, but taxes will be applied when the property is eventually sold.
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