What Are Marital Assets And Debts?
When a couple marries, a form of contract is created that governs the possessions and financial obligations of the couple as a couple, not just as individuals. As rights to own property have changed over the years, and rights to engage in business have also changed, the underlying obligations and responsibilities of couples have also changed.
Each country addresses these underlying obligations and rights in different ways. And in the U.S., each state and many counties have slightly different rules defining marital assets and debts.
In general, once a couple marries, much of what they accrue together, either through income or ownership, has some carryover of ownership to each person. The laws that determine how much of each item belongs to whom can differ from place to place.
Some common terms and issues for married people to consider with regard to asset and debt relationships are as follows:
- Community property (not all states recognize this)
- Equitable property (states that use this term specify what it means in their state statutes)
- Separate property (states describe this more specifically in their statutes)
- Inheritance (co-mingled and not co-mingled)
- Joint tenancy (with rights to inherit or not)
- Business ownership (defining operating agreements, members and officers)
- Debtors on credit cards (can be individual accounts with co-signors or joint accounts)
- Mortgage loans (can be single debtor, joint debtors, and co-signors)
- Titles (vehicle ownership may be affected by divorce and marriage, even when title remains unchanged)
- Deeds (home ownership; quit claims do not stop mortgage debt refinance issues occur)
- Vehicle loans (may be individual, joint or co-signed and still be the debt of both parties)
- Bankruptcy rules may be important to consider prior to divorce, as federal bankruptcy rules take precedence over local divorce rules and can impact debt even after divorce.