This is the next post in a series of articles discussing how property may be divided between divorcing spouses in Little Rock, Arkansas. Our previous post focused on the concept that marital property is generally divided equitably between the parties. Arkansas law presumes that each spouse is entitled to fifty percent of their joint assets and debts unless this outcome is unfair to one of them. This determination is based on a variety of factors, such as the length of the marriage, age of the parties, and sources of income. An experienced family lawyer can help explain how this analysis may impact your case. In this article, we will discuss the types of debts and assets that are considered marital or nonmarital property. If you need assistance, contact our office today to speak with an attorney.
When reviewing a couple’s assets and liabilities for purposes of dividing them in a divorce, the Judge must first determine what is marital and nonmarital property. Only marital property is subject to division under Arkansas’ equitable distribution rule. Nonmarital property is returned to the party who owned it before the marriage unless the Court decides that this creates an inequitable result. Marital property is defined as all property acquired by either spouse during the marriage. Exceptions to this definition include gifts or inheritances received by one party during the marriage, property acquired in exchange for the gift or inheritance, and the increase in value or income derived from the gift or property. Certain benefits to which one spouse is entitled, such as workers’ compensation claims, personal injury claims, or social security disability benefits are also considered nonmarital property.
While the definitions may seem fairly straightforward, it is not always easy to distinguish between marital and nonmarital property. Suppose, for instance, a wife inherits a large sum from her grandmother and deposits the money in a joint investment account with her husband. Over several years, both spouses deposit additional money into the account, which grows in value as a result of positive returns. They decide to withdraw a portion of the funds when they purchase a new family home. A few years later, they decide to divorce. Under the legal definition of marital property, her inheritance should not be considered marital property and she should, therefore, retain the amount she received, the growth from investing the money, and property she purchased with the cash. However, because she and her husband commingled her money with joint money in the same account, it becomes more difficult to attribute the increase in the account’s value between them. The use of some of the commingled funds to purchase a home further complicates the analysis. It may be necessary to engage forensic accountants or other experts to present evidence in Court to help untangle the complex account history. Depending upon the evidence and other factors in the case, the Judge may determine that the prolonged combination of the funds altered its character from a nonmarital to a marital asset.
If you or a loved one need assistance with a divorce matter, contact our office to speak to a Little Rock lawyer. We are experienced in family law issues and can help you understand your legal rights. In addition to Little Rock, we handle matters in Fayetteville, Fort Smith, Springdale, Jonesboro, North Little Rock, Conway, Rogers, Pine Bluff, and throughout the rest of Arkansas.