How Is Property Divided in a Rhode Island Divorce?
Divorce can be a stressful experience for any couple. From filing the correct paperwork to negotiating post-divorce issues like alimony and visitation, there can be a lot for spouses to worry about after deciding to end their marriage. One of the biggest stressors for couples and families is property settlement.
It can be nerve-racking to realize that your fate and financial security rests in the hands of the court. Who keeps the house, the car, or the family business? To protect your hard-earned assets and set realistic expectations, it's crucial to understand how equitable distribution works in a divorce. Keep reading to learn more about property division in Rhode Island.
What Is Equitable Distribution in a Divorce?
As an equitable distribution state, Rhode Island seeks to divide property equitably between couples in a divorce. Keep in mind that equitably doesn’t necessarily mean equally. While it isn’t uncommon for spouses to receive a roughly equal share of assets in their marriage, this is more common in community property states that seek to divide marital property equally between spouses.
Marital Property vs. Separate Property
Differentiating between marital property and separate property is crucial to understanding and preparing for equitable distribution in a divorce. Like other equitable distribution states, Rhode Island considers all property acquired during the marriage to be marital property (jointly owned by both spouses).
Any property acquired outside of the marriage is considered separate property (individually owned by one spouse). Keep in mind that certain exceptions may apply to the marital property rule, such as certain gifts or inheritances bestowed upon one spouse.
Which Factors Contribute to Property Division?
After determining which assets are marital property, the court will then decide how to divide it equitably between both spouses. In Rhode Island, family courts can consider a variety of factors to determine the distribution of assets and property division in a divorce.
According to Rhode Island General Laws §15-5-16.1, the court may consider any of the following factors to divide property equitably between divorcing couples:
- The length of the marriage;
- The conduct of both parties during the marriage;
- The contribution of each of the parties during the marriage in the acquisition, preservation, or appreciation of value of their respective estates;
- The contribution and services of either party as a homemaker;
- The health and age of the parties;
- The amount and sources of income of each of the parties;
- The occupation and employability of each of the parties;
- The opportunity of each party for future acquisition of capital assets and income;
- The contribution by one party to the education, training, licensure, business, or increased earning power of the other;
- The need of the custodial parent to occupy or own the marital residence and to use or own its household effects taking into account the best interests of the children of the marriage;
- Either party’s wasteful dissipation of assets or any transfer or encumbrance of assets made in contemplation of divorce without fair consideration; and
- Any factor which the court shall expressly find to be just and proper.
Division of Retirement Benefits
Dividing a couple's retirement benefits during a divorce can be tricky. Any retirement funds acquired during the duration of the marriage are considered marital property, meaning they will be split between both spouses. This is true regardless of whether one or both spouses contributed to that account. As long as the funds were contributed during the marriage, retirement benefits will be split between both partners.
On the other hand, retirement benefits acquired separately (e.g., before or after the marriage) are considered separate property, meaning that the contributing spouse can retain individual ownership over that specific portion of the funds.
Who Keeps the Business in a Divorce?
Divorce can be all the more nerve-racking as a business owner. The fate of your business depends largely on whether it's considered marital or separate property. If the business was initiated or acquired during the marriage, it's classified as marital property and subjected to equitable distribution. However, if one spouse owned the business prior to the marriage, it's considered separate property, meaning the court won't divide it between both spouses.
Family courts can split business shares in various ways, such as:
- Ordering one spouse to buy out the other's share;
- Ordering the sale of the business with the proceeds split equitably; or
- Allowing both spouses to continue running the business together.
Some key factors in these decisions include each spouse's contribution to the business, the value of the business, and each spouse's future financial condition. Keep in mind that business valuations can be a contentious and complex part of divorce that often requires the expertise of a forensic accountant or business appraiser.
If you’re undergoing divorce as a business owner, it’s imperative to consult with an experienced divorce attorney to retain a fair share of your hard-earned assets. Your lawyer can represent your best interests and negotiate effectively on your behalf to ensure an equitable distribution.
Contact Our Nationally Acclaimed Attorneys
Our knowledgeable advocates at McIntyre Tate LLP have over 30 years of experience representing couples and families throughout Rhode Island in various family law disputes. From parental relocation to uncovering hidden assets to child custody battles, our firm is here to provide the unwavering support and sound counsel you need to protect what’s yours. We can help you navigate the legal intricacies of property division and other divorce-related matters with wisdom and integrity, empowering you to turn the page and move forward from this difficult chapter. Don’t wait to start the happier, healthier life you deserve.
Our lawyers are committed to delivering effective and compassionate counsel to Rhode Island families. Call (401) 351-7700 to schedule a consultation.