Top 5 Reasons to Include Property and Debts in Your Divorce

About 50% of DivorceWriter customers list some property and about 30% list at least one debt. While the decision to list property and/or debts is left to entirely to the customer, below are some reasons you should consider when deciding whether to include any property or debts in your divorce.

1. The non-liable spouse has a legal remedy if the liable spouse doesn't pay on a debt as agreed.

Regardless of how debts are distributed between the spouses in the divorce Decree (Judgment), creditors maintain their right to seek payment from both debtors on delinquent joint debts. The same is true, of course, if one spouse agrees to be responsible for a debt in the other spouse's name alone and then the liable spouse doesn't pay. However, when one spouse is designated as the sole responsible party for a debt in the divorce, the non-liable spouse at least has the right to go back to court to seek compliance from the liable spouse if payment isn't made as agreed. Among the remedies available, the judge can garnish the wages of the liable spouse to satisfy the debt and/or find that spouse in contempt of court. If, on the other hand, the spouses simply agree outside of the divorce proceedings that one will be responsible for a debt, joint or otherwise, and then that spouse doesn't pay, the non-liable spouse has no remedy against the liable spouse.

2. Avoid disputes over yet-to-be transferred and sentimental property post-divorce.

Property Not Yet Transferred

If there is any property that you and your spouse have agreed will go to one of you, but for whatever reason, has not actually come into the possession of the recipient spouse yet, it should be listed in your divorce. Having a court order that clearly defines the ownership of this property will eliminate problems should the spouse in possession later refuse to surrender the property as agreed.

High Value, Sentimental and Any Other Potentially Contentious Property

If the property is of significant dollar value or sentimental value, you should probably list it in your divorce. Likewise, if there is any property, regardless of its value, that you can foresee becoming the subject of dispute between you and your spouse after the divorce is finalized, you should list it. Anything you can do now to avoid reasonably foreseeable property disputes post-divorce is well-worth the minimal effort involved in listing it in your divorce papers.

3. Titled property needs to be properly transferred in documents outside of the divorce.

Titled property refers to property that has some type of written documentation, such as the deed to real estate or the title to a motor vehicle, evidencing its ownership. With this type of property, the documentation controls the ownership rights and as such, especially in the case of jointly held property or separate property that will be awarded to the non-title holding spouse, it's very important that the divorce papers specify who will be receiving that property in the divorce. Besides clearly defining ownership rights, this property should be listed in the divorce because the divorce papers will also state the surrendering spouse must execute the necessary paperwork to effect the full transfer of property rights.

In the case of real estate, for example, the judge can order the surrendering spouse to sign a Quit Claim Deed within a certain amount of time, and if the surrendering spouse fails to do so, the other spouse can seek compliance in court and also ask for attorney's fees and court costs for having to get them to comply. The same is true of titles to vehicles, which must be properly signed off on before the property rights of the surrendering spouse can be fully extinguished. If nothing else, you need to have "clear title" before you can transfer (sell) real estate and vehicles or any other assets that are transferred by documentation independent of the divorce papers.

4. In states the require financial disclosure documents, the Settlement Agreement needs to be consistent with the financial disclosure forms.

More than half of the states require one or both spouses to complete documents listing property and debts. Commonly known as Financial Affidavits or Financial Disclosure Statements, these documents must be completed, signed (often in front of a notary) and in almost all of these states must filed in your divorce case. In some states, judges compare the financial forms closely with the sections of divorce papers that deal with property and debts, and when they aren't consistent, it can result in the judge ordering the parties to file amended documents.

Note: The following states require some type of Financial Disclosure Statements: AR,CA, CO, CT, FL, GA, HI, IA, ID, IL, KS, KY, MA, MD, MS, MT, ND, NH, OH, RI, SC, SD, UT, VT, WI, WV, and WY.

5. It's easy to include property and debts in your divorce.

When you use DivorceWriter to create your own complete divorce document package for your state, listing property and debts is easy. The DivorceWriter online interview has includes a property page and a debt page, and the information the customer enters on those pages is transferred to the applicable documents, usually either a Settlement Agreement. Depending on the state where you will be filing for divorce, the property page is divided into four to five types of property, namely real estate, vehicles, retirement plans, bank accounts, and all other property. In a few states, the property page may ask about a few other specific types of property. You can enter as much or as little property as your choose.

The debt page of the DivorceWriter online interview provides fields to enter the creditor name, amount owed and the spouse that will be responsible for the debt. If you want each spouse to be liable on the debt, enter it once for each spouse and indicate which portion allocated to each spouse. As with property, you can enter as many or as few debts as you choose.