Financial Implications of Divorce: Protecting Your Assets

Divorce happens. No matter how positive your intentions may be going into a marriage, multiple factors impact whether or not couples will stay together for good. The excellent news is divorce rates have been declining in recent years. In fact, in 2024, only 43% of marriages ended in divorce. This is down from the 50% statistic that has been the norm for several decades. However, these numbers only count for first marriages. According to statistics, the more times you’ve been married, the more likely you are to divorce. 60% of second marriages end in divorce, while over 70% of people who get married three or more times will divorce.

If you’re facing a divorce in Alabama, it’s vital to understand how the state divides property between the spouses. While you may think the assets you brought into the marriage or acquired during it may be protected, this might not be the case. No matter who purchased what during the relationship, there’s a chance it could end up going to your former spouse.

How is Property Divided During a Divorce in Alabama?

There are two primary types of division when it comes to splitting up assets during a divorce:

• Community Property
• Equitable Property

In a community property state, assets are divided 50/50 during a divorce. This means the court will determine the overall value of the property, then split it evenly between each spouse.

Things are much different in an equitable property state. Equitable means “fair and impartial,” not “evenly.” This means the court will determine what it is “fair” to give each spouse. The court will determine this fairness according to multiple factors, including who was primarily financially responsible during the marriage, who acquired the most property, and more.

Alabama is an equitable property state, which means the court must make certain decisions about who gets what in a divorce. Depending on the outcome, you could lose a good deal of your assets.

How Does the Court Decide How to Divide Equitable Property During a Divorce in Alabama?

Under Alabama law, all property falls into two categories during a divorce: separate property and marital property. Separate property is everything you owned before the marriage. Regardless of who purchased it, anything you or your spouse bought during a marriage becomes marital property. In determining how the property will be equitably divided, the court will consider several things:

• How long you were married
• How much money each party contributed to the marriage
• Your standard of living as a married couple
• The financial responsibilities of each spouse following a divorce, such as medical bills and child care
• The health of each spouse and how this may impact living separately
• Non-material contributions each spouse made to the marriage, including childcare, household responsibilities, etc.

The court will be making a determination on how much time, money, and resources each party contributed to the marriage. They will use this to decide which spouse is entitled to or requires more money and/or financial support after the marriage is dissolved. For example, if you made more money, but your spouse suffers from some kind of health condition or they were primarily responsible for raising any children, the court might decide they are entitled to more assets in the divorce.

It’s important to remember that, for purposes of a divorce, debt and loans are also considered assets. This means they can also be divided between the spouses. For example, if you or your spouse acquired credit card debt for expenses related to your home or automobile, the responsibility for that debt might be split between both parties. The same is true for student loan debt. Most of the time the court will try and take into consideration who acquired what debt and for what reasons. However, you could find yourself responsible for credit card or student loan debt your spouse acquired during the marriage.

Something else to keep in mind is that separate property can become marital property. For example, if you owned a car before your marriage, but you and your spouse used it equally or your spouse used it more than you did over the course of the marriage, a court could rule it became marital property. This means the assets you came into your marriage with are not necessarily protected.

How Can I Protect my Assets During a Divorce in Alabama?

Because every divorce is unique, there is no set guideline for equitable division. This means the final ruling for who gets what can come down to how well you’re able to make an argument before a judge. It can also end up depending on how sympathetic a judge decides to be to each party.

If you’re facing a divorce and worried about protecting your assets, don’t hesitate to contact Jim Golden Law, located at 1916 1st Avenue North Pell City, Alabama 35125, a quarter-mile South of Pell City Auction House and half-a-mile North of the Pell City Boys and Girls Club. Our founding attorney, Jim Golden, graduated with honors from Birmingham School of Law and has a deep passion for helping the families of Alabama with all their legal needs. He approaches every case with compassion, empathy, and understanding, and always seeks the best outcome for everyone he represents. He understands divorce is something that can happen to good people, and that everyone deserves a fair and fresh start.

Don’t let a court decide to take away money and property that’s rightfully yours. If you think you may be getting divorced soon or are currently going through a divorce, contact Jim Golden Law today at 866-950-6652 or email us for a free thirty-minute strategy session. We’ll go over your situation, your options, and how to get the best outcome for you. Divorce can be a scary situation; any big change is. Jim Golden Law can be there for you every step of the way to make the process as easy as possible.