What Happens to Assets and Debts in Divorce?
People fight about two things in divorce: kids and money.
People fight over these things because their ultra-important. Nothing is more important than ensuring children are taken care of in a healthy, nurturing environment where they can grow up and be successful.
And to create such an environment, you need money. You need money for a good home, money for healthy food, money for education, and on. So, money and kids are intertwined. You can’t deal with one and not the other.
Equitable Division of the Assets and Debts
Utah is an equitable division of the assets and debts state. Equitable means fair. Fair has been interpreted by the Utah courts to mean equal, unless there is a good reason it shouldn’t mean equal.
So, the general rule is all debts and assets will be split evenly between husband and wife.
For example, if a couple owns a home, sells it as part of the divorce, and pockets a total of $100,000 in equity (after paying realtor fees, etc.), they will each receive $50,000.
Likewise, if a couple has $20,000 in credit card debt, they generally will each have to pay $10,000. (For the most part, it doesn’t matter who actually bought purchased stuff with the card, just that it was bought when you were together during the marriage.)
Post-Separation Debts and Assets
So, what happens if people have been separated for a while and they incur debt or accumulate assets?
If someone incurs debt, that debt will usually be theirs 100%. The logic is you can’t separate from a spouse, run up massive debt on your stuff, then make your spouse pay for it. (A common exception to this is if the debt was incurred to maintain marital property, like the home, or to pay for children’s necessities.)
Now, if marital property increases in value after separation, both parties will usually share that increase equally. For example, if the marital home goes up in value after separation but before you sell it, everyone will get their equal share of that increase.
And what if you win the lottery or get a huge raise at work after you separate? Honestly, that will depend on a lot of factors, like the total time of separation. In fact, there are way too many factors to list here. If you have a situation like this, let’s talk about it.
