1. Chapter 11:
Property Division
12
Family Law for the Paralegal
2nd Edition
Wilson
Class Name
Instructor Name
Date, Semester

2. LEARNING OBJECTIVES
After this lecture, you should be able to:
11.1 Identify the five phases of the property division 12
process.
Distinguish between separate and marital
11.2 property.
Identify kinds of property subject to division
11.3 when a marriage dissolves.
Class Name
Instructor Name
Date, Semester
Cont.

3. LEARNING OBJECTIVES
After this lecture, you should be able to:
11.4
Distinguish between the community property
and equitable distribution approaches to
12
property division.
List factors courts consider when dividing
11.5 property and liabilities upon divorce.
Describe the paralegal’s role in the property
11.6 division process.
Class Name
Instructor Name
Date, Semester

4. Learning Objective
After this lecture, you should be able to:
Identify the five phases of the
11.1 property division process.

5. What are the five phases of the
11.1 property division process?
• Definition of property: What is “property” and what
property do the parties have?
• Classification of property: Is the property “separate”
or “marital” property?
• Identification of property subject to division upon
divorce: Which property can the courts reach to
effectuate a division of property?
• Valuation of property: What is the property worth –
how and when is it valued?
• Division of property: How is property divided – what
approaches do the courts apply?
5

6. 11.1 What constitutes property?
• The threshold question in a property division case is “Does
a particular asset fall within a definition of “property”?
• Some assets are clearly property such as houses, boats,
cars, jewelry, antiques and art work. But some assets such
as the goodwill of a business, a pet, or a professional
degree may or may not be considered “property”
depending on the jurisdiction.
• In the first stage of the property division process, the
parties identify all of their potential assets and liabilities
including both tangible property (property that has a
physical form such as a car or cash) and intangible
(property that has no physical presence such as a patent
or a pending legal claim).
• See Cases 11.1 Traczyk v. Traczyk (1995), 11.2 Bennett v.
Bennett (1995), and 11.3 Woodworth v. Woodworth (1983)
on pages 372-375 of the text.
6

7. Learning Objective
After this lecture, you should be able to:
Distinguish between separate
11.2 and marital property.

8. What is the difference between
11.2 separate and marital property?
• Separate property refers to property that a spouse
owned before marriage or acquired during the
marriage by inheritance or gift from a third party and
it may also include property acquired during the
marriage in exchange for separate property.
• Marital property refers to property that is acquired by
either or both parties during the marriage, other than
by gift or inheritance, that is subject to division at the
time of dissolution of the marriage.
8

9. What kinds of assets are difficult to
11.2 classify as separate or marital?
• Disability awards: The majority of courts focus on the underlying
purpose of the award – a disability component will be viewed
as separate property and a retirement component as marital
property.
• Personal injury awards: The majority position is that the portion
designed to compensate the recipient for pain, suffering, or
disability is categorized as separate property and the
component designed to make up for economic losses is
considered marital.
• Appreciation in the value of separate property may be
classified as separate or marital often based on whether the
appreciation was passive (it resulted from market forces or the
passage of time) or active (it resulted from effort).
• Accrued sick or vacation leave: The courts vary but will usually
focus on the extent to which the benefit can actually be paid
or can only be applied to postretirement health insurance
benefits, etc.
9

10. Can property change from separate to
11.2 marital or from marital to separate?
• A transmutation or change can take place in the
character of property during a marriage in a number of
circumstances. For example:
• The parties may execute a postmarital agreement and
designate certain separate property as marital.
• They may decide to jointly title the marital home or other
property for estate planning or other purposes.
• They may treat a separate asset as a marital asset by
spending both time and funds on it such that a court may
find it has changed into a marital asset.
• They may have commingled funds for example by
placing the proceeds from the sale of separate property
into a joint bank account.
10

11. Learning Objective
After this lecture, you should be able to:
Identify kinds of property subject
11.3 to division when a marriage
dissolves.

12. 11.3 What property can a court reach when dividing the
parties’ property upon divorce?
• There are two approaches taken by the courts:
– Dual property states: The majority of states follow the general
rule that only the property acquired during the marriage is
subject to division by the court. Property belonging to a
spouse prior to the marriage that has not changed in
character remains the property of that spouse.
– All property states: The minority position is that the court may
assign any of a spouse’s property (including separate
property) at the time of divorce if necessary to effectuate an
equitable division of property.
12

13. When and how is marital property
11.3 valued for purposes of division?
• There are three basic issues in valuation cases:
– Which property of the parties should be valued?
• If the parties have few if any assets or they can agree on a reasonable
allocation of property, valuation may not be an issue. The assets most
commonly valued are pensions, real estate, and business interests.
– What is the appropriate date for valuation?
• Some states establish the date by statute or case law, Most prefer a flexible
approach so the date might be the date when the parties separated, the
date the Complaint for Divorce is filed, the date discovery is completed, the
date of the divorce, or some other agreed upon date.
– Who will conduct the valuation and how?
• Valuation of some assets such as bank accounts and vehicles is relatively
straightforward. However, in some cases it may be necessary to have
professional assistance such as an actuary to calculate insurance and
pension values, appraisers to estimate the value of real estate, or an expert
of some kind to value a professional practice or business, a copyright, or a
spouse’s contribution as a homemaker.
13

14. Learning Objective
After this lecture, you should be able to:
Distinguish between the
community property and
11.4 equitable distribution
approaches to property division.

15. 11.4 What are the three primary ways in which the
property of parties to a divorce may be divided?
• The parties may have executed a valid premarital
agreement in which they mutually agreed on how their
property would be divided in the event their marriage
terminated in a divorce or legal separation.
• The parties may negotiate a mutually agreeable division
of their property and include it in their separation/marital
agreement for approval by the court.
• If the parties are unable to reach an agreement, the
matter will be tried before the court and a judge will
determine an appropriate distribution applying equitable
distribution or community property principles.
15

16. What is the community property
11.4 approach to property division?
• In the community property approach, a husband and wife hold
property acquired during the marriage in common and each
spouse is generally deemed entitled to a one-half interest in
the property no matter in whose name it is held. It is based on a
view of marriage as a partnership in which both parties act for
the benefit of the marital unit.
• When the community property approach is applied, the marital
property is usually divided equally upon divorce absent an
agreement to the contrary. Separate property remains
separate property and generally includes assets brought into
the marriage, property acquired in exchange for separate
property, and gifts and inheritances received by a spouse
during the marriage.
• A minority of the states are community property states. See
Exhibit 11.5 Community Property – Ten Commonly Asked
Questions on pages 389-391.
16

17. What is the equitable distribution
11.4 approach to property division?
• The equitable distribution approach is based on the legal
concept that upon divorce property accumulated during
a marriage should be divided between the parties
equitably, but not necessarily equally, based upon
principles of fairness.
• Each state adopts by statute and/or case law a series of
factors to be considered by the courts when making a
property distribution. Judges consider the factors in light
of the facts of each case, recognizing that both parties
have contributed to the marriage in a variety of ways
(financially, maintaining the home, raising the children,
etc.). A trial court’s decision generally will not be reversed
on appeal absent an error in applying the law or an
abuse of discretion.
• A majority of states apply this approach.
17

18. Learning Objective
After this lecture, you should be able to:
List factors courts consider when
11.5 dividing property and liabilities
upon divorce.

19. 11.5 What are some of the factors the courts consider
when dividing the parties’ property upon divorce?
• In an equitable distribution jurisdiction, the following
factors are commonly considered among others:
• The contribution of each party to the acquisition,
preservation, or increase or decrease in value of the
marital property
• The duration of the marriage
• The relevant economic circumstances of each spouse
• The age, health, station, occupation, amounts and
sources of income, vocational skills, employability,
estate, liabilities, and needs of each of the parties
• The custodial provisions for any children
19

20. What are some of the factors the courts consider
11.5 when dividing the parties’ property upon divorce?
(continued)
• The reasonable opportunity of each spouse for future
acquisition of capital assets and income
• The tax consequences of the property division
• A minority of states will consider marital misconduct.
• See Case 11.4 Wade v. Wade (2005) on pages 386-388 of
the text for an application of this approach by a Vermont
court.
• In a community property jurisdiction, the marital assets
are essentially divided equally. The general rule in most
community property states is that the courts may consider
conduct when dividing the marital estate particularly
economic misconduct such as dissipation of marital
assets, concealing assets or disposing of them in a
fraudulent matter.
20

21. Learning Objective
After this lecture, you should be able to:
Describe the paralegal’s role in
11.6 the property division process.

22. What is the role of a paralegal in
11.6 a property division case?
• Tasks commonly performed by paralegals in property
division cases include the following:
– Helping to compile an inventory of the parties’ assets and
liabilities
– Drafting discovery requests (such as requests for production of
documents from employers, and deposition questions and
interrogatories relating to factors considered by the court such as
dissipation of marital assets)
– Drafting motions, supporting affidavits, and proposed orders, if
required (such as a motion for appointment of an appraiser)
– Researching governing law (statutes, case law, and secondary
sources) relevant to disputed issues (such as the treatment of
professional goodwill of a business or the proceeds of personal
injury awards)
– Drafting property provisions for inclusion in separation
agreements (addressing assets and liabilities)
– Helping to prepare exhibits for use in negotiations, hearings, and
at trial
22

23. Chapter Summary
11.1 Identify the five phases of the property division 12
process.
Distinguish between separate and marital
11.2 property.
Identify kinds of property subject to division
11.3 when a marriage dissolves.
Class Name
Instructor Name
Date, Semester
Cont.

24. Chapter Summary
11.4
Distinguish between the community property
and equitable distribution approaches to
12
property division.
List factors courts consider when dividing
11.5 property and liabilities upon divorce.
Describe the paralegal’s role in the property
11.6 division process.
Class Name
Instructor Name
Date, Semester