When most people get married, they tend to pool their resources with the property that their spouse already owns. Over time, the two of them together can often achieve a higher overall standard of living than either would have been able to maintain on their own.
Unfortunately, the inverse of that reality is also frequently true. Couples often have to accept a reduction in their standard of living as part of the divorce process. Not only will their household income drop, but they will have to divide the resources that they have acquired while married.
Motor vehicles are often valuable assets that may also represent a significant debt burden if they are not yet owned outright. Especially if someone’s motor vehicle has a loan attached to it still, there can be intense disagreement about what should happen to the car in the divorce. Who gets to keep a shared vehicle?
Spouses often have to share the value
Although it is typical for spouses to technically share their ownership interest in their vehicles, typically one vehicle will be registered for one spouse and will have insurance in their name. When spouses negotiate their own settlements for vehicles and other valuable property they might simply keep the assets that they currently use. That may include the vehicle. The person who drives it more may retain the vehicle and compensate the other for its value.
Judges often follow a similar approach when considering marital assets. The spouse who keeps the vehicle will typically end up refinancing it so that there is no confusion about who owes the money for the vehicle and who is the owner of record following the divorce. The spouse who doesn’t keep the vehicle can ask for some of its equity.
In the equitable distribution process that divides people’s marital property, judges try to focus on what would be fair given the length of the marriage, the income of each spouse and other specific factors from the marriage. For those who have very specific requests from the divorce courts, like retaining a vehicle, it may be necessary to consider mediation or collaborative divorce so that they have control over the final terms set for property division matters.
Thinking about the property that will matter the most when trying to rebuild after a divorce can help people to set appropriate asset division priorities and realistic expectations during their divorce proceedings.