Ohio is an equitable distribution state, when it comes to dividing property upon divorce, which means that all of a couple’s marital assets must be divided equitably. Assets that are not considered marital, on the other hand, remain in the sole possession of the original owner. For this reason, how assets are labeled plays an extremely important role when it comes to who will retain what property. To ensure that your own property is not mislabeled, it is important to contact a property division attorney who has the experience, knowledge, and resources to assist you.
Although courts are required to divide a couple’s property equitably upon divorce, this does not mean that all assets will be divided equally. Instead, courts will take a number of different factors into account before coming up with an arrangement that it deems fair. One of the factors that courts consider is how much separate property each party will retain. Separate property includes all assets or debts that were acquired before the marriage took place. This can include bank account funds, real estate, personal possessions, as well as debt such as student loans. However, these same assets and debts would be considered marital property if they were obtained after the marriage occurred. There are a few exceptions to this rule, in which assets obtained after marriage are still considered separate property and so are not divisible upon divorce, including:
It is also possible for separate property to become marital property even if it was obtained prior to the marriage. For instance, if a person had significant savings in a bank account at the time of the wedding, but then uses those funds to help purchase or improve the family home, those funds would most likely be considered commingled and so would be considered marital property.
As more and more students are forced to take out loans in order to finish their education, issues regarding how those debts should be divided upon divorce continue to arise at an increasing rate. Generally, when courts determine how student loan debt should be divided upon divorce, they enter into the same analysis as with any other type of property, so loans obtained prior to a marriage are usually considered the sole responsibility of the person who took them out, while loans obtained during the marriage are considered marital property and so must be equitably divided.
However, some courts have been willing to award the entirety of a student loan debt to the spouse who took out the loan and benefitted from it, even if it was obtained during the marriage. If, for instance, the spouse who took out the loan will receive the sole benefit of the degree, courts are willing to award responsibility for the entire debt to that party, especially if none of the loan proceeds were used to pay family expenses. This scenario is common in cases in which a party does not earn a degree until after the end of the marriage, meaning that the other spouse never benefited from the increase in income that came with obtaining the degree.
If you and your spouse are considering divorce and you have questions about how your assets and debts will be divided, please contact our property division legal team at Fout Law by calling 330-437-7455 today.