When dividing property during a divorce, several factors are considered, 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 a professional license or degree itself is not considered marital property, a court may use its equitable powers to grant reimbursement if one spouse contributed financially to the other’s education. This reimbursement is only applicable if actual expenses can be demonstrated, not a share of the professional degree’s value.
Pension Benefits: Pension benefits that accumulate during the marriage are considered marital property and are subject to division. This includes 401k plans, profit-sharing plans, and similar benefits, regardless of whether the non-employee spouse contributed directly to acquiring them.
Personal Injury Settlements: If a personal injury claim arises between the marriage and the final separation, any proceeds from the settlement are considered marital property.
Marital Debts: Debts are categorized as either marital or separate. Debts incurred during the marriage are typically deemed marital debts. The court will evaluate the following factors when determining the status of debts:
- The purpose of the debt,
- Who incurred it,
- Who benefited from it,
- Who is in the best position to repay it.
Goodwill: Goodwill, which refers to the reputation and client base of a professional practice or business, may be considered marital property if it can be valued in monetary terms.
Future Interests: Potential future interests in property are not subject to division during the divorce process.
In contrast to property division, which typically addresses past assets, alimony is concerned with future support needs.
Tax Consequences: Although property transfers or equitable distribution payments are not taxed at the time of transfer, they become taxable when the property is eventually sold.
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