by Tamar Oberman Faulhaber

In Georgia, the law provides that assets and debts are to be “equitably divided.” In other words, the division must be fair.

A couple was dividing their assets during their divorce. The wife assumed her husband’s pension was not up for grabs, because it was in his name, and he would not be entitled to receive any benefit for another fifteen years—to her it was worthless. She also was willing to let her husband keep his business. After all, she didn’t know how to run it. She was happy just to keep the house and some savings. In Georgia, the law provides that assets and debts are to be “equitably divided.”In other words, the division must be fair. “Would this be a fair split of the assets?”she asked. It depends on several factors.

Only those assets and debts that were acquired during the marriage are divided pursuant to the divorce. These assets are called marital property. There are exceptions, however, including property received as an inheritance, premarital property, and gifts from third parties. These exceptions are the separate property of the spouse who received the property. If the husband in the example above earned the pension and acquired the business during the marriage, both are subject to equitable division. Otherwise, they are not.

All kinds of property are divisible, including tangible assets such as real estate, furniture, automobiles, bank accounts and investments, and intangible assets such as residuals, patents, and copyrights. Retirement accounts, pensions and annuities may also be divided to the extent they were earned during the marriage, even though neither spouse is actually receiving or entitled to receive any benefits at the time the divorce is granted. Appreciation of separate property assets caused by the efforts of either spouse may also be divided at the divorce. The value of a family-owned business, including goodwill, may also be considered. In the above example, business appraisers and financial experts would be hired to determine the value of the business and pension.

Once the values of the various marital assets and debts are determined, one fair way of determining who gets what is to divide the parties’ net worth equally and distribute assets and debts such that each ends up with half their net worth. However, equitable division does not necessarily mean equal division. A judge or a jury may consider other factors, such as each spouse’s contribution to the acquisition and maintenance of the property (such as money paid or time spent in upkeep as a homemaker), the purpose and intent of the parties regarding the ownership of the property, the estate of each of the parties, the duration of the marriage, prior marriages of either spouse, and the contributions or service of each spouse to the family unit.

In this case, without the input of experts and an attorney discerning the nature of all of the assets, it would not be wise to say whether the wife’s proposed division was fair or not.

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For more information, go to www.national-law.com or contact Tamar Faulhaber at 404.846.2001 or TFaulhaber@Georgia-Law.com.