Property and Debt Division in an Iowa Divorce
(How property and debts are divided in divorce.)
Iowa is an "equitable property" state. This means that all marital property acquired during the marriage should be divided fairly, but not necessarily equally. The court begins by presuming that an equitable distribution is an equal distribution. The "marital" property, consisting of any other property acquired by either spouse during the marriage, will be divided equally, unless the court finds that equal division would be unjust. Courts will also protect and promote the best interests of children of the parties and may set aside a portion of the parties' property in a separate fund for the support, maintenance, education, or general welfare of the couple's minor children. (IA 598.22D) Any property possessed by either spouse during the marriage is presumed to be marital property unless it can be shown that the property is actually separate property. Gifts and inheritances to one party, for example, may be property that is considered as separate from marital property. A court can determine the rights of the spouses in any pension or retirement plan or their rights under any insurance policy. A number of factors affect how the division of property will be determined, such as:
- the duration of the marriage,
- the property brought to the marriage by each party,
- the contribution of each party to the marriage, giving appropriate economic value to each party in homemaking and child care activities,
- the age and physical/emotional health of each party,
- the social or economic status of each party,
- the employability and sources of income of each party,
- the ability of the custodial parent to engage in gainful employment without significantly interfering with the interests of the minor children,
- The provisions of an antenuptual (sometimes known as a prenuptial) agreement,
- The needs and liabilities of each party,
- Each party's opportunity for future acquisition of wealth/capital,
- the actions of either party that contributed to the growth/diminution of the value of property acquired during the marriage,
- One party's payment for or other contribution toward the education, training, or earning power of the other, or interruption of one party's career for the best interests of the spouse, family, or children,
- The earning capacity of each party, given the amount of time away from work to raise children, the time needed to obtain education and training, and to find new employment that will enable the party to earn sufficient income to enable the party to become self-supporting at a level reasonably comparable to that enjoyed during the marriage.
- Any written agreements between the parties regarding property distribution,
- The value of property acquired by gift or inheritance,
- The tax consequences for each party of various proposed arrangements.
- The desirability of awarding the family home and its effects to the party having custody of the children or if there is joint custody, then the party having physical care of the children.
- The amount and duration of support payments (alimony) to be ordered and whether property division can suffice as a substitute. (IA 598.21)
Approaches to Dividing Property in Divorce
It is wise for a divorcing couple to determine how to divide their property and debts themselves, when they can, rather than leave it to the judge. But, if a couple cannot agree, the alternate method is to submit their property dispute to the court, which will use state law and its best judgment as a guide to divide the property.
Division of property does not necessarily mean a physical division. Rather, the court awards each spouse a percentage of the total value of the property. It is illegal for either spouse to hide assets in order to shield them from property division. Each spouse gets items whose worth adds up to his or her percentage.
How do we distinguish between marital and non-non-marital property?
Very generally, following are the rules for determining marital and non-marital property:
- Marital property includes all earnings occurring during the marriage and everything acquired with those earnings. All debts incurred during marriage, unless the creditor was specifically looking to the separate property of one spouse for payment, are marital property debts.
- Non-marital property of one spouse includes gifts and inheritances given just to that spouse, personal injury awards received just by that spouse, and the proceeds of a pension that vested (that is, the pensioner became legally entitled to receive it) before the marriage. Pensions purchased with a spouse's separate funds remains that spouse's separate property. A business owned by one spouse before the marriage remains his or her separate property during the marriage, although a portion of it may be considered marital property to the extent the business increased in value during the marriage or both spouses worked at it.
- Property purchased with a combination of separate and marital funds is part marital and part non-marital property, so long as a spouse is able to show that some separate funds were used. Non-marital property mixed together with marital property generally becomes marital property, however.
Who gets to live in the house during the divorce?
If you don't have children and the house is the separate property of just one spouse, that spouse has the legal right to the property. If, however, you have no children and own the house jointly, Iowa offers parties the option of going to court for a Temporary Decree setting forth the rights and responsibilities of both parties as relates to their financial assets and liabilities. The Temporary Decree remains in effect during the remainder of the divorce proceedings, until the judge issues the final decree.