Property Division in Georgia Divorce
Equitable Division in Georgia
Is Georgia a Community Property State?
Georgia is not a community property state. Divorce laws in Georgia are based on both parties having equitable interest pertaining to marital property. In a Georgia divorce, marital property is awarded based on the court’s perception of equitable distribution. Equitable Distribution does not mean a 50/50 split of property.
The FindLaw website provides this summary of how Georgia divorces divide property, "In Georgia, property division during divorce is governed by court cases instead of legislative statutes. Georgia courts will generally distinguish between what’s marital property and what’s separate property. Marital property is defined as those assets acquired during the marriage, like real estate, stocks and bonds, cars, income, and some insurance policies. Assets defined as separate property will normally include property acquired before marriage, gifts, inheritances, and items you and your spouse agree are separate property." 1
Equitable Distribution Terms You Need to Know
In order to understand the Georgia Equitable Distribution Statute there are terms that you need to know. The most relevant terms are as follows:
What is Marital Property?
In Georgia, marital property refers to assets acquired during the marriage. Typically this includes things such as real estate, vehicles, boats, furniture, etc.
What is Pre-Marital Property?
In Georgia, pre-marital property, also called separate property or non-marital assets refers to anything that a person owned before the marriage. Pre-marital property is not subject to division in the divorce.
Personal Property vs. Real Property
The difference between Real Property and Personal property is relatively simple. One explanation is found on the NerdWalet.com website which reads, "The main difference between real property and personal property is that real property is land and any permanent structures on it; personal property refers to anything else you can own. ". 2
Personal Property is anything that is "movable in nature, has inherent value or is representative of value, and is not otherwise defined as realty". Examples of personal property are jewelry, clothing, furniture, sporting goods, and personal effects. Highly personal items, such as clothing, are not typically part of property division. Common personal property, such as furniture, cars, etc. are part of property division actions. Personal property that is part of a valued collection (i.e., art, coins, etc.) may be considered when dividing property.
Real Property refers to property that is of a fixed nature such as land, houses, buildings, etc. Further, the term "real property" also includes anything growing on the land, fences, walkways, ponds, swimming pools, yard lighting, irrigation systems, and similar property improvements.
What is Equitable Distribution?
Unlike the 50/50 split approach in community property statutes, equitable distribution applies relevant factors to achieve fairness to both parties.
What types of factors does a court consider for equitable distribution? Nearly every person who goes through a divorce has to deal with substantial lifestyle changes. Many of these changes occur because of a diminished financial situation and added responsibilities in daily life.
Among the factors considered are (for each spouse): their current income streams, income earning potential, investments, savings and retirement funds. Additionally, child-related circumstances can influence how property is divided. If one parent has to care for a special needs child this typically requires more money and may impair the parent’s ability to have a good paying job.
Equitable Distribution is Georgia’s approach to using existing assets and information to promote the best post-divorce life for both parties. The GADivorceOnline website mentions the following, "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.".3
What is the Equitable Distribution Process?
Identifying assets and property to be divided in a divorce can be a time consuming process. However, this is a necessary and critical part of getting a divorce. Ideally, you and your spouse can work together to create a list of property and assets.
You need to include some level of details for certain assets. Typically, this is the estimated market value of real and personal property. For financial accounts you need to identify the type of account, balance and any information that will affect value (i.e., ongoing contributions, accumulating interest, etc. ). Be certain to note the exact date that balance information was obtained.
If possible, you and your spouse can discuss what you both think is fair a fair division of assets. Identify any items on which you both cannot agree, and add simple notes on your thoughts.
Both parties should provide the same information to their respective divorce attorneys. While the attorneys may have questions, providing each attorney with the same list can reduce some costs.
The divorce attorneys can review the information provided, litigate any open items, and incorporate this into the draft of the divorce Settlement Agreement.
When the Settlement Agreement has been completed it can be submitted to the court for final review and approval. If the court has any objections, your respective attorneys can help you find agreement and closure.
Qualified Domestic Relations Order (QDRO)
For certain financial accounts you may need your lawyers to manage opening/closing new accounts and converting funds. These transactions are often addressed in a QDRO (Qualified Domestic Relations Order).
What is a QDRO? The Investopedia website defines a QDRO as, "A qualified domestic relations order (QDRO) is a legal document, typically found in a divorce agreement, that recognizes that a spouse, former spouse, child, or other dependent is entitled to receive a predefined portion of the account owner’s retirement plan ass".4
What is Strategic Property Division?
While it is easy to look at your current situation when litigating property division, you need to think long term as well. A smart move is to hire a divorce lawyer that has experience in estate planning. Specifically, you want to be awarded assets that will deliver the greatest value.
Transferring, moving, and taking possession of certain investment accounts may bring income tax issues. Some assets may have a greater potential than others to grow value over time. Some assets may offer liquidity to buy a new house or relocate. Some assets, such as rental property, may drain your finances to maintain value.
Ask your lawyer for their advice on the best assets to take for your imediate and long-term needs.
Division of Inherited Assets
The matter of controlling inherited assets can be complicated. For example, a Trust in your name, created when you were a child, can be considered pre-marital (separate) property. If you take possession of the funds, and add the funds to a jointly-owned financial account, the funds are then marital property.
Likewise, inheriting property that it titled (i.e., real estate, vehicles, etc.) would be pre-marital (separate) property unless they are re-titled in the name of you and your spouse.
Don’t Commit a Crime!
It is illegal to affect hiding assets or otherwise trying to cheat your spouse. This includes transferring property into another person’s name, selling property, or falsely reporting the value of any property. An exception is, before you file for divorce, you and your spouse agree to sell certain property and equally split the proceeds.
Any skilled divorce lawyer has techniques to determine if you are hiding assets. The Justia website provides the following comments, "Even without a forensic accountant involved, you and your divorce attorney will still have many other ways to attempt to locate hidden assets. One way is through the divorce discovery process. “Discovery” is the evidence gathering process before trial in which the parties are required to answer certain questions and turn over documents or other evidence. Common documents that a spouse may be asked to turn over are tax documents, account statements, loan documents, and any other paperwork that relates to assets." 5
Lying on a financial affidavit or testifying falsely in divorce court is perjury. This is punishable by fines and jail time. Additionally, the judge will also rule on the division of any previously hidden assets. It is worth noting that even if you got away with it during your divorce process, once your divorce is final there is no staute of limitations. Your ex could take you to court at any time in the future.
How Prenups Affect Property Division
Georgia divorce laws recognize premarital agreements (also called prenuptial agreements or antenuptial agreements). A prenup is a legal document, effectively a contract, between the soon-to-be spouses. The agreement identifies and provides protection of specific assets, property, and possessions that may be acquired during the marriage. This agreement can include virtually anything you want, and becomes legally binding upon signature by both parties. A prenup can isolate and protect assets from being lost in a divorce. Contact a family law attorney and learn how to create a binding prenup agreement in Georgia.
Life after divorce is not always easy. You need to approach property division litigation with serious thought. Whether you’re planning a divorce or ready to file, we encourage you to contact our divorce lawyers for expert representation.
CREDITS & FOOTNOTES
- 1 FindLaw Team, “Georgia Marital Property Laws”, May 11, 2018, Available from FindLaw
- 2 Kurt Woock, “Real Property vs. Personal Property: Difference and Types”, June 8, 2023, Available from Nerd Wallet
- 3 Staff Writer, “Property and Debt Division in a Georgia Divorce”, May 5, 2022, Available from GADivorceOnline.com
- 4 Julia Kagan, “What Is a Qualified Domestic Relations Order (QDRO)?”, September 21, 2022, Available from Investopedia
- 5 Staff Writer, “Hidden Assets & Your Legal Rights in Divorce”, October 13, 2022, Available from Justia
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