Division of Assets Unequal in Value
Dividing the family's assets during a divorce can be considerably challenging.
Determining who should get what can be quite a hassle, even under the most docile of situations. But, if you are not on friendly terms with your spouse, then this can be all the more complicated.
If you two can't come to an understanding about how to divide your property and debts during the divorce process, then a court will have to decide for you.
But how does a judge make a reasonable division?
Well, as with most matters, it depends. Every state's law varies, but if you live in a ‘community property' state (Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), all property – including cars – bought after the date of marriage and before divorce will be deemed jointly owned or “community property,” and will be divided evenly (or 50-50) in a divorce.
On the other hand, if you live in an ‘equitable distribution' state (all other states), judges don't have to divide assets equally, but in a way they consider is equitable and reasonable.
But the question remains. How do you divide a car? Well, you don't.
Not all property can be divided physically, but the couple seeking a divorce can share or split the value of property, depending on state law.
In states that are ‘community property', judges usually divide the value of community property evenly. For instance, a couple owns a car that has a market value of $10000, each one of them is designated to 50% of the value of the car, or $5000.
So if one of them wants to keep the car they'll have to buy their spouse out with cash or a transfer of some other property worth $5000.
In equitable distribution states, judges divide property equally, which may or may not be turn out to be 50-50.
If one spouse wishes to keep a car bought during the marriage, he or she can attempt to justify to a judge why that would be a reasonable result.
It's likely that one of you has a greater need for the car – in order to get to take the kids to school, for instance. Eventually, the judge aims to reach a fair result and may award the car to you as you need it the most.