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What You Need to Know About Property Division in Your Divorce

Drew Duncan
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Partner at Zimmer, Duncan and Cole, LLP

A critical aspect of your divorce will be your property settlement where your spouse’s and your property is divided. This not only includes dividing bank accounts, mutual funds, retirement accounts, and real estate but also marital debt. The division of property can be accomplished through a property settlement agreement that you and your spouse agree to or could be decided by the judge. Understanding how property is divided in a divorce in South Dakota can help you obtain a fair share of your marital property.

How Property Is Divided in a South Dakota Divorce

South Dakota is an equitable property division state, which means that your marital property will be split equitably based on how you and your spouse lived during your marriage and your financial needs after the divorce. It does not mean that the property will be distributed equally. If you and your spouse do not agree on how to divide property, the circuit court judge assigned to your case will make the final decision. The judge will most likely take the following approach:

  • You and your spouse will provide financial information regarding all of your assets and debts, including the value of any property, through the discovery process where you are required to exchange this information with each other. This will help the judge determine what property is marital property.
  • Each asset and debt will be valued, usually using information provided by you and your spouse.
  • Property and debts will be equitably divided between you and your spouse.

In a divorce, your property will be classified as marital or separate property. Marital property is property belonging to the marriage and is generally property that was acquired or earned during the marriage. Separate property is property you owned before your marriage or that was only given to one of you during your marriage, such as inherited property. However, if the separate property is used for the benefit of the marriage or shared with your spouse, it could be considered marital property. An example of this could be a house you inherited from a family member that you and your spouse lived in for years and you both spent considerable money on home improvements.

Even if property is titled in the name of one spouse, the judge could consider it marital property if that is the most equitable way to divide the property. Factors a judge may use in making a property division decision include:

  • Each person’s contributions to acquiring marital property. This can include monetary and non-monetary contributions, like homemaking and staying home to raise the children.
  • The length of the marriage.
  • Your age and your spouse’s age.
  • Your health and the health of your spouse.
  • Each person’s earning ability now and in the future.
  • The value of the property being distributed and its income potential.

A spouse’s fault in causing the divorce is not considered in dividing property even if you must prove fault as a grounds for getting divorced.

Three Steps to Dividing Debts in Your Divorce

Dealing with marital debt is an important part of your property settlement to enable you to get a fresh start in your new life. Generally, debt incurred during a marriage is considered marital debt, and you and your spouse would be equally responsible for paying it. Once you and your spouse separate, any debts you incur, such as credit card debts, could be considered your own debt. You should take the following steps in dealing with marital debts:

  • Find out about all of your debts. You need to know about all the debts you and your spouse have. If you do not know or he is hiding assets, you can order a free credit report from AnnualCreditReport.com and this could help you figure out what you owe.
  • Freeze your accounts. Once you understand your financial situation, you do not want to make it worse. You need to close your joint accounts, like bank accounts, credit cards, and other loans, so the amount owed doesn’t get larger. Be sure to discuss closing the accounts with your spouse and your divorce attorney before taking this step.
  • Allocate responsibility. Your best approach is to pay off all joint debts or finance the amount you will be responsible for in your name only and have your spouse do the same before your divorce is finalized. Your other options are to have one party assume more of the debt, but also receive a larger share of the marital property, or to split the debt equally. Often one spouse is awarded the marital home and agrees to assume responsibility for paying the mortgage, taxes, insurance, and other expenses in exchange for getting it.

Unfortunately, credit card companies and other financial institutions are not bound by your agreement on debts with your spouse. This means that if he agrees to pay a certain credit card debt that you jointly owe with him and does not do it, the credit card company can require you to pay the entire debt. That is why it is always best to transfer accounts so you only have debts you agree to be responsible for in your name before your divorce is finalized.

If you are considering filing for divorce, start an online chat or call our experienced legal team at 888-733-2992 today to schedule a free consultation.

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