Frequently Asked Questions
Options: one spouse buys out the other's equity (requires refinancing to remove the departing spouse), or the home is sold and proceeds split. The buyout spouse must qualify for a mortgage on their own. Tax issues: sale may trigger capital gains; buyout transfers equity free of tax.
Inheritance is typically separate property of the recipient spouse, even if inherited during the marriage. However, if the inherited money was deposited into a joint account and used for family expenses, it may be treated as marital property depending on state law and intent.
Business valuation uses professional appraisals (income, market, or asset approach). The owning spouse may buy out the other, business may be sold, or a continuing operation arrangement agreed upon. Valuation disputes are common and often go to expert testimony.
A QDRO is a court order allowing division of retirement accounts without early withdrawal penalties or tax consequences. Improperly drafted QDROs can trigger tax liability. The plan administrator must approve the QDRO; proper drafting is critical.
Retirement accounts (401k, IRA, pension) are marital property and can be divided in divorce. A QDRO transfers the recipient spouse's share without tax penalty. The exception is property excluded by law (some military pensions have specific rules).
Generally, property acquired after separation is separate property, not marital property subject to division. However, if earned income from employment during separation is used to purchase property, disputes arise over whether that income is marital.