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Divorce (Property & Debt Distribution)

Common Questions About Divorce (Property & Debt Distribution)

It is always easier if you and your spouse can reach an agreement about property and debts. However, if it is unlikely that you will be able to come to such an agreement, you will have to go to court where a judge will decide who gets what property and who has to pay what debts. The FindLaw Guide to Divorce and Property Division provides basic information on property division during a divorce.

Wyoming is an “equitable distribution” state, meaning the court will divide the property in a way that is fair considering several factors. In some cases, a fair division will be an equal (50/50) division. In other cases, however, the judge may decide to award one spouse a greater percentage of the marital property.

There are no hard and fast rules that determine who gets what property in a divorce action. The factors a judge may consider are:
Where the property came from (gift, inheritance, purchase);
If one spouse owned the property before the marriage;
If the spouses kept their money in joint or separate bank accounts;
How much money each spouse is making now and is expected to make in the future;
Whether it would make sense for a specific item to go to the parent with custody.

The court has considerable discretion when deciding how much weight these factors are given.

Equitable distribution is based on the idea that marriage is a partnership. Both spouses contribute to the partnership directly and indirectly, financially and non-financially, and the product of those contributions is able to be divided. Basically, a court will value the contributions of the spouse who is primarily responsible for raising the children, making a home, and an array of other personal services even though these contributions are not in the form of money.

Helpful things to know about equitable distribution in a divorce action:
Everything purchased during the marriage is subject to division;
Whose name or money was used to buy the property is not controlling;
The spouses, not the judge, have to prove what property exists;
Neither spouse should get rid of or sell off property in anticipation of divorce. Doing so may result in that spouse having to pay the other spouse back her or his share;
The court takes into consideration the merits of the parties and the condition in which each will be left after the divorce.

The type of property that will be divided is any land or houses, motor vehicles, home furnishings, money in bank accounts, stocks and bonds, pensions and retirement benefits, etc. The judge can also decide who should pay the marital debts. You should get a lawyer if retirement benefits, pensions, or real property (land or a house) will be issues in your divorce case. All marital property has to be divided, even the smaller items. This FindLaw checklist will allow you to formulate a property distribution for consideration in your case.

Not necessarily. While a court may consider title as evidence of separate property, title in and of itself does not determine whether an asset is separate or marital property. For more information, this Justia article answers many Frequently Asked Questions about equitable distribution.

If you and your former partner do not agree on how to divide your property, you will almost certainly need an attorney, and a judge will most likely have to decide. It is a good idea for unmarried couples to have a written agreement about property at the time they begin living together.

The divorce judgment will state which spouse should pay the debt but, for joint debts, you are both responsible for making sure that the creditor gets paid. If you both agreed to be responsible to pay at the time of the purchase, a divorce judgment does not change the creditor’s right to expect payment from both or either spouse.

If the bill is not paid, a creditor can ask for payment from both spouses. The creditor can also file a lawsuit against either one or both spouses for the unpaid bill.

The divorce judgment will probably state which spouse should pay the debt. But if the spouses were living together when one spouse made the purchase for family expenses, the other spouse is usually also responsible to the creditor and could be sued, too. If the spouses were separated when one spouse signed for the debt, the other spouse might not be responsible to the creditor unless the debt is for the children’s education, health, or support needs.

You can tell the creditor that your ex-spouse was ordered to pay in the divorce judgment. You can also give the creditor information about how to find your ex-spouse. In many cases, especially if your ex-spouse has more money than you do, the creditor will first try to get payment from the spouse who was ordered to pay the bill in the divorce. If you pay the bill or if the creditor brings a lawsuit against you, you may have the right to take your ex-spouse to court so you can get reimbursed (paid back) for the money you paid. It is important that any court order be specific about who is to pay which debt and what will happen if he or she doesn’t pay the debt ordered.

The Supreme Court of Wyoming has determined that retirement funds and pension accounts are marital property, whether vested, non-vested, or not matured, and are divisible upon divorce. Division of this type of property is very complex and there is no specific rule or arrangement that is applicable to each individual case. If you do have a retirement fund or your spouse has a retirement fund, you should seek the help of a legal professional.

Even if your decree of divorce awards you certain property, some types of property need additional documents to transfer title.  Title to property doesn’t automatically transfer to you, so depending on what you were awarded in your decree of divorce, you may still need additional documents to transfer title.  This includes retirement accounts or pension plans, real property (such as houses or land), vehicle or mobile home titles, bank or investment accounts.

If a retirement account or pension plan is divided in the decree of divorce, you will need a separate Qualified Domestic Relations Order (QDRO).

You will need a deed to transfer real property.

You may need an attorney to help you draft a QDRO or deed to transfer real property.  Click here for help finding a lawyer.

Retirement and pension plans can only be divided by a special order called a Qualified Domestic Relations Order (QDRO). If your decree of divorce awards you part of your spouse’s pension or retirement account, you must have a QDRO drafted, signed by the judge, filed, and served on the administrator of the retirement or pension plan.

Drafting a QDRO is complicated. There is no do-it-yourself form. Each retirement or pension plan may have different requirements for what is included in the QDRO. You will likely need a lawyer to help you draft a QDRO. Click here for help finding a lawyer.

Warning! If you don’t successfully submit a QDRO that is accepted by the administrator of the retirement or pension plan, you won’t get your share of retirement funds that were awarded in the decree of divorce.

Child Support:
Child support payments are neither deductible by the parent paying support nor taxable income to the parent receiving child support payments.

Exemptions:
Usually, the parent who has legal custody has the right to claim the child as a dependent for tax purposes, but can sign a form to give the other parent this right. For information about exemptions you should talk to a lawyer or call the IRS.

Spousal Support:
You have to pay taxes on spousal support payments you get and you can deduct spousal support payments you make. The Internal Revenue Service has special rules about what payments qualify as spousal support for tax purposes.

Property Transfers:
There are special tax rules about property transfers. For information about taxes, you can talk to a lawyer, accountant, tax preparer, or contact the IRS.

Forms About Divorce (Property & Debt Distribution)

Resources About Divorce (Property & Debt Distribution)

Resources

Divorce and Family Law Glossary
Definitions for legal terms frequently used in family law type cases. From FindLaw.com.

Wyoming Divorce Overview
This handout provides an overview of Divorce procedures in Wyoming.

Find a Lawyer
Click the link above to learn more about finding a legal aid or private attorney.

Wyoming Statutes and Court Rules
Title 20 Domestic Relations
Wyoming Rules of Civil Procedure

Your local county library has print versions of Wyoming statutes and rules. The print set includes references to additional relevant Wyoming materials which you may find useful.

Information About Divorce Information About Spousal Support
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