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Property Division Lawyer
Since Alabama is an “Equitable Distribution” state, all marital property will be divided equitably according to the court unless agreed to otherwise by the divorcing spouses. What does “equitable” mean? Equitable can be defined as “what is fair, not necessarily equal.” Courts in Alabama treat most property a couple acquires during marriage as marital property. The law allows a judge to divide such property in any manner that the judge deems fair, regardless of which spouse owns the property. If a spouse owns property before marriage or acquires it by gift or inheritance, a court will usually consider this to be the spouse’s separate property and will not divide it at divorce.
During the divorce, if a couple wishes to sell their property using a real estate agent, they must agree together on how to proceed. If one party wants to sell and the other does not, it’s often left up to the judge to decide what happens to that property. Some divorces are amicable, and the property can be sold with ease. The money made from the sale will be split between the parties, allowing both parties to go their separate ways.
In Alabama, most property acquired after the marriage and before separation is considered marital property. All marital property is divided equally during divorce. Assets acquired before marriage or after separation are separate property. However, at times, some assets prove to be more complicated in determining whether they are community or separate property, including assets requiring the tracing of funds used to acquire the asset, business interests, professional practices, intellectual property, retirement plan benefits, and personal investments.
Frequently Asked Questions About Property Division in Alabama Divorce
What is equitable distribution in an Alabama divorce?
Alabama uses equitable principles when dividing marital property in divorce. Equitable means a division the court considers fair under the circumstances; it does not necessarily mean an equal 50/50 split.
Is marital property always divided 50/50 in Alabama?
No. Alabama courts are not required to divide marital property exactly equally. The court may consider the circumstances of the marriage and the parties when deciding what division is equitable.
What property is usually considered marital property?
Property acquired during the marriage may be treated as marital property depending on how and when it was acquired, how it was used, and other facts relevant under Alabama law.
What is separate property in an Alabama divorce?
Separate property can include certain assets owned before marriage or acquired individually by gift or inheritance. Whether an asset remains separate can depend on how it was used or treated during the marriage.
Can property owned before marriage ever be divided?
Property owned before marriage is often treated differently from marital property, but its treatment can depend on factors such as whether it was used for the common benefit of the marriage or became mixed with marital assets.
How are gifts treated in an Alabama divorce?
A gift made specifically to one spouse may be treated as separate property, but the facts surrounding ownership, use, and commingling can affect how the asset is analyzed.
How are inheritances treated in an Alabama divorce?
An inheritance received by one spouse may be treated as separate property in some circumstances. The result can depend on whether the inherited property or income from it was used for the common benefit of the marriage.
What does commingling mean in property division?
Commingling occurs when separate and marital funds or assets are mixed together. Commingling can make it more difficult to determine whether an asset should remain separate or be treated as part of the marital estate.
What is tracing in a divorce property case?
Tracing is the process of following the source and movement of funds to determine whether an asset or portion of an asset can be identified as separate rather than marital property.
How is the marital home divided in divorce?
The marital home may be sold and the proceeds divided, awarded to one spouse subject to other financial adjustments, or handled through another arrangement approved by the court or agreed upon by the spouses.
Can one spouse force the sale of the marital home?
If the spouses cannot agree about what should happen to jointly owned real estate, the issue may have to be resolved by the court as part of the divorce.
What happens if both spouses agree to sell the house?
If the spouses agree to sell the marital residence, they can negotiate the listing process, payment of expenses, and division of the net sale proceeds, subject to the divorce settlement or court order.
How are mortgages handled in property division?
A divorce judgment or settlement may assign responsibility for mortgage payments and ownership of the property, but a divorce order does not automatically remove a spouse from a loan obligation owed to the lender.
How are vehicles divided in an Alabama divorce?
Vehicles may be allocated to one spouse or the other as part of the overall property division. The court or settlement may also address vehicle loans and any equity in the vehicles.
How are bank accounts divided in divorce?
Bank accounts may be classified as marital, separate, or partly both depending on their source and use. Marital funds can be divided as part of the overall equitable distribution.
How are investment accounts treated in divorce?
Investment accounts can be subject to division to the extent they are marital property. Account ownership, contributions, growth, and the source of funds may all be relevant.
How are retirement accounts divided in Alabama divorce?
Retirement benefits accumulated during marriage may be considered in property division. The type of retirement plan and the timing of contributions can affect what portion is marital and how it may be divided.
What is a QDRO?
A Qualified Domestic Relations Order, commonly called a QDRO, is a specialized court order used with certain retirement plans to divide benefits in accordance with a divorce judgment or settlement.
Can pensions be divided in divorce?
Pension benefits may be considered marital property to the extent recognized under Alabama law. Dividing a pension may require plan-specific language or a specialized court order.
How are business interests valued in divorce?
Business interests can require valuation of assets, income, liabilities, ownership rights, goodwill, and other factors. Accountants, valuation professionals, or other experts may be involved in complex cases.
Can a professional practice be divided in divorce?
A professional practice may present complex valuation and ownership issues. Its treatment depends on the nature of the practice, ownership restrictions, marital contributions, and applicable law.
How is intellectual property handled in divorce?
Intellectual property, royalties, patents, copyrights, trademarks, or related income rights can create complex valuation and classification questions when acquired or developed during marriage.
How are personal investments handled in divorce?
Personal investments may be marital, separate, or mixed depending on when they were acquired, the source of funds, and how the assets were managed during the marriage.
Can one spouse hide assets during divorce?
A spouse should disclose assets and financial information as required by the court process. If hidden assets are suspected, lawful discovery tools can be used to request documents and financial information.
What should I do if I suspect hidden assets?
Tell your attorney and preserve financial records you lawfully possess. Discovery, subpoenas, depositions, forensic accounting, and other lawful methods may help identify undisclosed assets or income.
What financial records are useful in a property-division case?
Useful records may include tax returns, bank statements, investment statements, retirement records, deeds, mortgage statements, business records, loan documents, credit-card statements, insurance records, and appraisals.
How are marital debts divided in Alabama?
Marital debts may be allocated between the spouses as part of the divorce. The court can consider the nature of the debt, who incurred it, the purpose of the debt, and the parties' financial circumstances.
Does it matter whose name is on an asset?
Title can be relevant, but it is not always the only factor. An asset titled in one spouse's name may still be considered marital depending on how and when it was acquired and used.
Does it matter whose name is on a debt?
The name on a debt matters to the creditor, but the divorce court may separately allocate responsibility between the spouses. A divorce order generally does not change the creditor's contractual rights.
Can spouses agree on property division without a trial?
Yes. Spouses can negotiate a property settlement directly, through their lawyers, or in mediation. A complete settlement can avoid having the judge decide property issues at trial.
Can mediation help with property division?
Yes. Mediation can help spouses negotiate real estate, retirement accounts, vehicles, investments, business interests, debts, and other financial issues.
What happens if spouses cannot agree on property division?
If the spouses cannot reach an agreement, the court may hear evidence and enter a property-division order as part of the divorce judgment.
Can property division affect alimony?
Property division and alimony are separate but related financial issues. The assets and debts awarded to each spouse can be relevant to the parties' overall financial circumstances.
Can property division be changed after the divorce is final?
Final property-division provisions are generally treated differently from modifiable custody or support orders. Whether any post-judgment relief is available depends on the judgment, timing, and applicable law.
Can tax consequences affect a property settlement?
Yes. Transfers or sales of real estate, retirement assets, investments, and business interests can have tax consequences. Parties should consider appropriate tax advice before finalizing a settlement.
Do high-net-worth divorces require special property analysis?
They often do. High-net-worth cases may involve closely held businesses, multiple properties, investments, retirement plans, executive compensation, trusts, or complex tracing and valuation questions.
Why hire a property-division lawyer in an Alabama divorce?
A property-division lawyer can help identify assets and debts, analyze marital versus separate property, obtain financial information, negotiate a settlement, and present evidence to the court when disputes cannot be resolved.
Where does Ferguson & Ferguson handle property-division cases?
Ferguson & Ferguson handles divorce property-division matters from its Huntsville and Decatur offices and serves clients throughout North Alabama.
Where is Ferguson & Ferguson's Huntsville office?
The Huntsville office is located at 303 Williams Avenue SW, Suite 321, Huntsville, Alabama 35801.
Where is Ferguson & Ferguson's Decatur office?
The Decatur office is located at 211 Oak Street NE, Decatur, Alabama 35601.
How can I contact Ferguson & Ferguson about property division?
Call the Huntsville office at 256-534-3435 or the Decatur office at 256-350-7200 to discuss a divorce property-division matter.
This information is provided for general educational purposes and is not legal advice. Property-division outcomes depend on the specific facts of each case and current Alabama law.
Decatur and Huntsville Property Division Attorneys
If you have questions regarding your marital property, call us now. To learn more about our attorney’s ability to protect your assets as your divorce proceeds, contact 256-534-3435 or 256-350-7200.
Huntsville Office Location:
303 Williams Avenue SW
Suite 321
Huntsville, AL 35801
Decatur Office Location:
211 Oak Street NE
Decatur, AL 35601