Interviewer: How does division of assets work when you file a divorce? How are assets divided? What are assets?
Michael Anderson: Marital assets are any property that has been co-mingled with both parties, or that was acquired during the marriage. When I say co-mingled, when parties first get married, the husband might have five grand and the wife might have ten grand, and they put it in a joint account. The minute they do that that’s called co-mingling funds, and so that means that now has become marital property in the state of Utah.
Utah is Not a Community Property State, But a Marital Property State.
Utah’s not a community property state, just a marital property state. What that means is when you’re married, you buy things together, you own things together, so that part of the marital property is jointly owned by both people – and that means at divorce, the marital property will be split 50-50 unless agreed on otherwise, which sometimes happens. So if you have two cars and there of approximate equal value, most of the time one party will get one car and the other party will get the other car. Sometimes there’s a discrepancy in value – maybe the wife has the newer car and the husband has the older car. In that type of a situation then Richard, one party would have to financially off-set the other. If they got the benefit they may do that by way of cash – giving actual money to the other party – or maybe it’s an off-set with the retirement benefit or something like that.
Child Support is a Separate Process From Alimony or Spousal Support in Utah
Interviewer: Does child support and spousal support come into that balance. Or is it excluded from the division of assets balance?
Michael Anderson: Child support is usually a very separate thing because child support is really – it’s for the children and it’s done by an automatic calculator. So we just literally punch in gross numbers, number of kids and a few other figures, and it will give us a number. And that is child support. And we usually can’t waiver too much from it unless the parties agree. Now alimony – that is used as a tool or bargaining chip in the division of assets. And the court – if it actually goes to trial – will look at that as well, as just one of the factors.
If a House Can’t Be Sold During a Divorce For Whatever Reason, One Party Can Stay In It
Interviewer: What happens if you have a house, and a lot of money is owed on it, and if it can’t be sold in the divorce process, what will happen with a big asset like that? Would the house have to be sold in the divorce or could it just be given to one and then off-set by payment to the other?
Michael Anderson: Yes that can be done. If you’re negotiating a settlement, either directly or through mediation, we can be very creative in how we structure the sale of the house that would’ve been done in real estate market. If the house can’t be sold for whatever reason, we can have one party stay in it. Whoever stays in it, is the party that’s going to be making the payment and paying for the maintenance of the property and the taxes. But we can either lock in the price for equity purposes – that can be done either with an appraisal, real estate comps or through a tax value, or an amalgamation of anyone of those numbers, or an average of them. And then what we do is we say, ‘okay there is a hundred thousand of equity in there’, for example, that means each party will be entitled to 50,000. So hey, let’s say wife gets it and she has to sell it or re-finance it within ten years, say. So in ten years, when she sells it or re-finances it he’ll get his fifty grand. That’s just an example of what you can do. Now if it actually goes to trial, courts don’t like to do those type of creative things. The court will simply say,’ it has to be sold, list it with a realtor’. As soon as it’s sold, you split the equity. That’s what usually happens.
It’s Usually Better To Try And Settle Matters Outside Of Courts During A Divorce
Interviewer: So that’s one reason to avoid court and to try to settle things outside of court if possible.
Michael Anderson: Yes and it’s also possible to settle certain things, and only take to court the things that you can’t settle. So I did a trial about three/four weeks ago in a divorce case where we settled everything except for three things – which were child support, child custody and visitation. I mean those were the only issues, everything else – the property was already divided and all the other issues were taken care of. So those were really the only issues left.