Dividing Money And Property After A Divorce

Authored By: Lagniappe Law Lab

About Dividing Money and Property After a Divorce

About Dividing Money And Property After A Divorce

This provides information on the process of dividing money and property after a divorce. It covers the legal term of partition, the introduction to property partition, and the classification of property as community or separate.

The Court will divide all of the community assets and liabilities and assign them to each spouse so that each spouse receives property of an equal net value. The Court may divide a particular asset or liability equally or unequally or may allocate it in its entirety to one of the spouses. The Court will also determine the liabilities.

Community debts are those that are incurred during the marriage for the benefit of the spouses jointly or incurred by one spouse during the marriage for the benefit of the other spouse. If the former spouses can agree on who will receive the property and who will pay the debts, the Court can approve a Consent Judgment of partition. Otherwise, the Court can decide disputes about whether property is community or separate and divide the money and debts between the spouses.

What You Need To Know

In the context of a divorce, community property refers to assets and debts acquired during the marriage by either spouse, while separate property refers to assets and debts acquired by one spouse before the marriage, after the filing of a divorce petition, or by inheritance or gift during the marriage. In Louisiana, things in the possession of either spouse during the existence of the matrimonial regime are presumed to be community property, but either spouse may prove that a thing is their separate property. The Court will classify each piece of property owned by the spouses as either community or separate property as part of a partition proceeding.

The Court determines the liabilities, including community debts, during the division of property and money after a divorce by following the rules set forth in Louisiana Revised Statute 9:2801. Community debts are those that are incurred during the marriage for the benefit of the spouses jointly or incurred by one spouse during the marriage for the benefit of the other spouse. The Court will adjudicate the parties' claims arising from the matrimonial regime, including claims for reimbursement related to education and training of the other spouse during the community or if one spouse used their separate property to pay community debts. The Court will allocate the liabilities to each spouse, obligating that spouse to extinguish that liability. The allocation in no way affects the rights of creditors. If the spouse to whom the debt is allocated fails to satisfy the debt, the other spouse may still be responsible to pay the creditor. If this happens, the spouse who was obligated to pay the debt will be obligated to reimburse the spouse who was not responsible but had to pay anyway.

One spouse may have a claim for reimbursement related to the education and training of the other spouse during the marriage if the community did not benefit from the education or training. Additionally, a spouse may have a claim for reimbursement if that spouse used their separate property to pay community debts. These claims are adjudicated by the Court as part of the division of property and money after a divorce, and they are considered in the allocation of liabilities and assets between the spouses.

The Court ensures that each spouse receives property of an equal net value during the division of assets and liabilities by following specific guidelines. Louisiana Revised Statute 9:2801 states that the Court will divide all of the community assets and liabilities and assign them to each spouse so that each spouse receives property of an equal net value. The net value is determined by subtracting the amount of debt allocated to one spouse from the value of the property assigned to that spouse. To achieve an equal net value for each spouse, the Court may divide a particular asset or liability equally or unequally, or allocate it in its entirety to one of the spouses. The Court considers the nature and source of the asset or liability, the economic condition of each spouse, and any other relevant circumstances in making these allocations. If the allocation of assets and liabilities results in an unequal net distribution, the Court will order an "equalizing payment" to ensure that each spouse receives property of an equal net value. This equalizing payment can take various forms, such as cash or deferred payments, and may be secured or unsecured, as directed by the Court.

The Court may allocate assets and liabilities unequally or assign them entirely to one spouse based on various factors and circumstances. According to Louisiana Revised Statute 9:2801, the Court considers the nature and source of the asset or liability, the economic condition of each spouse, and any other relevant circumstances in making these allocations. Additionally, if the allocation of assets and liabilities results in an unequal net distribution, the Court may order an "equalizing payment" to ensure that each spouse receives property of an equal net value. This demonstrates that the Court has the discretion to allocate assets and liabilities unequally or entirely to one spouse to achieve a fair and equitable division of property and money after a divorce.

"Equalizing payments" are payments ordered by the Court to ensure that each spouse receives property of an equal net value during the division of assets and liabilities after a divorce. If the allocation of assets and liabilities results in an unequal net distribution, the Court will order these payments. Equalizing payments can take various forms, such as cash or deferred payments, and may be secured or unsecured, as directed by the Court. The Court may also order the execution of notes, mortgages, or other documents as it deems necessary, or impose a mortgage or lien on either community or separate property, movable or immovable, as security. This ensures that the division of property and money is fair and equitable, even if it requires additional financial arrangements to achieve an equal net value for each spouse.

When faced with unfair allocations of assets with sentimental value, the Court may employ alternative means to address the situation. According to the document, if the allocation of an asset, in whole or in part, would be inequitable to a party, the Court may use alternative means. This can include ordering the parties to draw lots for the asset, similar to a lottery system, or allowing the parties to bid for the asset. Additionally, the Court may order the private sale of the asset on terms and conditions deemed proper, including setting a minimum price. These measures are designed to address situations where the monetary value of an asset is less than its emotional or sentimental value to the spouses, ensuring that the division of property and money is as fair and equitable as possible given the circumstances.

When an asset cannot be allocated to a party, assigned by the drawing of lots, or sold at private sale, the Court may order a "partition by licitation," which is a public sale of the asset. In this event, the Court will fix the minimum bids and other terms and conditions upon which the property is offered at public sale. Additionally, the Court must expressly state the reasons why the asset cannot be allocated, assigned by the drawing of lots, or sold at private sale. This process ensures that the division of assets and liabilities is conducted in a transparent and legally sound manner, even in cases where private sale or allocation to a party is not feasible.

The Court can order a "partition by licitation," or a public sale of an asset, only in the event that the asset cannot be allocated to a party, assigned by the drawing of lots, or sold at private sale. This means that the Court will first attempt to allocate the asset to one of the parties or sell it at a private sale before resorting to a public sale. If these options are not feasible, the Court may order a public sale of the asset. In such cases, the Court will fix the minimum bids and other terms and conditions upon which the property is offered at public sale. Additionally, the Court must expressly state the reasons why the asset cannot be allocated, assigned by the drawing of lots, or sold at private sale. This ensures that the division of assets and liabilities is conducted in a transparent and legally sound manner, even in cases where private sale or allocation to a party is not feasible.

When the Court allocates a liability to a spouse during the division of assets and liabilities after a divorce, that spouse is obligated to extinguish that liability. However, the allocation does not affect the rights of creditors. This means that the spouse to whom the debt is allocated is responsible for paying that debt until it is satisfied. The other spouse is not responsible for paying the debt. However, if the spouse to whom the debt is allocated fails to satisfy the debt, the other spouse may still be responsible to pay the creditor. In such a scenario, the spouse who was obligated to pay the debt will be obligated to reimburse the spouse who was not responsible but had to pay the creditor. This ensures that the rights of creditors are preserved while clearly defining the responsibilities of each spouse regarding the payment of allocated liabilities.

A Consent Judgment of partition can be approved by the Court if the former spouses can agree on who will receive the property and who will pay the debts. This agreement allows the Court to approve the Consent Judgment of partition. It provides a means for the former spouses to come to an agreement on the division of property and debts without the need for the Court to decide disputes. This can streamline the process and provide a mutually agreed-upon resolution to the division of assets and liabilities after a divorce.

In a partition proceeding, the Court classifies property as either "community" or "separate" based on specific criteria. The law governs how the Court makes the classification, depending on when the property was purchased or otherwise acquired and how it was purchased or otherwise acquired. There is a presumption that things in the possession of either spouse during the existence of the matrimonial regime are community property, but either spouse may prove that a thing is their separate property. If either spouse asserts a separate property claim in a partition proceeding, the Court will evaluate the facts presented and determine whether the disputed property is legally classified as community property or separate property. 

During the partition of community property, the Court follows specific rules as outlined in Louisiana Revised Statute 9:2801. These rules include:

  1. Valuing Assets: The Court values the assets as of the time of the partition trial, considering the current worth of the property rather than the amount spent when it was purchased. This may involve accepting evidence from the parties to determine the current value of the assets, including real property, valuable jewelry, art, or other home furnishings.
  2. Determining Liabilities: The Court determines the liabilities and allocates them to each spouse, ensuring that the allocation of debts is conducted in a manner that results in an equal net value distribution.
  3. Adjudicating Claims: The Court adjudicates the claims arising from the matrimonial regime, including claims for reimbursement if one spouse contributed to the education and training of the other spouse during the community, as well as claims for reimbursement if a spouse used their separate property to pay community debts. 

These rules provide a framework for the Court to fairly value assets, allocate liabilities, and address claims arising from the matrimonial regime during the partition of community property.

Yes, spouses can hire experts to appraise real property like lands and houses, as well as other valuable assets like jewelry, art, or other home furnishings during the partition process. The Court will accept evidence from the parties to show how much the property is worth at the time of the partition trial. Hiring experts to appraise valuable assets can help ensure that the assets are accurately valued, which can be important in determining an equal net value distribution of assets and liabilities between the spouses. 

Last Review and Update: Dec 19, 2023
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