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Property and Debt, Civil Rule 26.1 and Discovery

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Property & Debt for Married Couples | Property & Debt for Unmarried Couples | Civil Rule 26.1 | Other Types of Discovery

Property & Debt for Married Couples

View video: Marital Property and Debt Play Marital Property and Debt  Video

What is property?

Anything that is owned or can be owned, such as land, automobiles, money, stocks, retirement accounts, an interest in a pension etc. Sometimes you will be asked to describe real property, which means buildings or land. All other property is personal property. In divorce and dissolution cases, people often mean property AND debt when they refer to property.

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What is debt?

Any money owed to a business or person. Some common types of debt in a divorce or dissolution case include credit card debt, medical bills, mortgages, car loans, or personal loans.

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What's the process for handling property and debt in a divorce or dissolution?

There is a 3-step process:

  1. identify the marital property and debt
  2. value the marital property and debt
  3. divide the marital property and debt.

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What does "identify the marital property and debt" mean?

You must distinguish marital property/debt from separate property/debt. Marital property/debt will be divided between you and your spouse as part of the divorce; separate property/debt will not be divided.

The general rule is that marital property and debt is any property or debt acquired during the marriage for the benefit of the marriage. However, just because a party acquired property before marriage does not necessarily mean that it won’t be considered marital property. A spouse's premarital separate property can become marital when a married couple demonstrates an intent, through their words or actions during marriage, to treat one spouse's separate property as marital property. Gifts and inheritances are generally separate property, although gifts for the benefit of the marriage, such as a dishwasher, may be considered marital property.

"During the marriage" generally means from the time of marriage until the time of separation.

People often dispute what property/debt is marital or how long the marriage lasted. When this happens, you are urged to consult with an attorney to learn about the various legal arguments that may be available to you.

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What does "value the property and debt" mean?

There are two things to keep in mind when valuing property and debt:

  1. property must be valued at its "fair market value," which generally means the garage sale value, and
  2. the value of both property and debt should be set as close to trial as possible.

Remember, your property and debt worksheet will probably go through a couple of drafts as you try to figure out how to divide the property. You should be able to value everything pretty accurately during this pre-trial period, but just before trial you may end up changing some values if, for example you have retirement accounts that fluctuate as the stock market changes.

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What is a fair and equitable division of property?

Property and debt must be divided in a fair and equitable way.

For a marriage of some length, "fair and equitable" often means 50-50. However, after considering the factors listed below, the court may decide that it is "fair and equitable" to give one party more or less than 50%.

For short term marriages, the court may find it most appropriate to simply put the people back into the economic position they had before the marriage. In other words, he gets what was his at the beginning of the marriage, and she gets what was hers.

How to divide the property and debt usually creates the most disagreements between people. You are strongly urged to consult with an attorney to discuss whether your proposed division of property and debt is likely to be accepted by the court.

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What are the Merrill factors?

The factors the court must consider when in making its decision, which are in the statutes at AS 25.24.160(4), are as follows:

(A) the length of the marriage and station in life of the parties during the marriage;

(B) the age and health of the parties;

(C) the earning capacity of the parties, including their educational backgrounds, training, employment skills, work experiences, length of absence from the job market, and custodial responsibilities for children during the marriage;

(D) the financial condition of the parties, including the availability and cost of health insurance;

(E) the conduct of the parties, including whether there has been unreasonable depletion of marital assets;

(F) the desirability of awarding the family home, or the right to live in it for a reasonable period of time, to the party who has primary physical custody of children;

(G) the circumstances and necessities of each party;

(H) the time and manner of acquisition of the property in question; and

(I) the income-producing capacity of the property and the value of the property at the time of division.

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How do I find out what property or debt exists?

Civil Rule 26.1, and other discovery tools empower you to get the information you need to make your proposal of how the property and debt should be divided.

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Where do I find out more information about different stages of a case or specific topics?

This website has forms and information for all of the stages of the case. You can also find information about specific topics such as divorce, custody and parenting, child support, paternity and Qualified Domestic Relations Orders - dividing retirement benefits.

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Property & Debt for Unmarried Couples

Can the court divide people’s property that lived together, but never married?

Yes. The court can divide the property of people who lived together in cohabitation or were domestic partners, but who are not married. However, unmarried couples need to file a separate civil case to deal with dividing their property and debt. There are no court forms for filing a complaint to divide property of unmarried couples who split up. There are different legal theories that may apply depending on the specific situation in the relationship. You should talk to an attorney about how to draft up the papers to start the case, to understand your legal rights and obligations, and to consider what legal arguments to make in your case.

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Should an unmarried couple have a written property agreement?

Yes. In an ideal world unmarried couples should have a written property agreement that states who owns what, how they plan to pay for specific items and property, and what should happen to the property if their relationship ends. This can help avoid a serious and possibly expensive battle over how to divide the property if and when they split up. Without a written agreement, it can be hard to figure out how they intended to own or pay for the property they have.

There are three main categories of property to be considered in an agreement:

  1. property that comes with documented evidence of who owns it, such as real estate, vehicles, stocks and bonds, and bank accounts
  2. income, and
  3. personal possessions.

If one party of an unmarried couple dies, the surviving party does not automatically inherit any of the deceased partner’s property. The result might be different if the deceased partner had a will or other legal document (joint tenancy agreement, living trust, etc.) which stated that the survivor is to inherit some or all of the deceased person’s property.

If you are in an unmarried relationship and want to prepare a written property agreement, you can talk to an attorney or find information on the Internet.

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How does the court divide the property and debt of an unmarried couple?

The court will determine the parties’ express or implied intent when dividing property from the time the parties were together. In other words, the court will want to see evidence about how the parties’ actions and/or words (either written or spoken) show who owned different property and assets and who is to be responsible for any debts.

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What does the court look at when it tries to figure out the intent of the parties?

Some people who live together but don’t get married choose to have a written agreement that states who owns what and whether you want to keep all of your property separate or share some or all of it. The court will consider such an agreement in figuring out the parties’ intent when dividing property when they split up. If you are in an unmarried relationship and want to prepare a written property agreement, you can talk to an attorney to help you write an agreement or find information on the Internet.

However, most people who live together do not have written agreements. The court will look closely at the facts in each case to figure out what the parties, expressly or impliedly, intended. In such cases, the court will consider several factors to figure out the parties’ intent. For example, have the parties:

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Will the court use the same factors to divide unmarried couples’ property that are used in a divorce?

No. To divide the property and debt of unmarried people, the court looks at the parties’ express or implied intent. It does NOT try to make sure a property division for unmarried couples is fair and equitable or look at the factors considered when dividing marital property in a divorce.

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Is one party in an unmarried relationship responsible for the debts of the other party?

That depends on how the debt or account where the debt occurs was structured. In most situations, financial responsibility is created by a contractual relationship. For example, if one party applied for and received a credit card and also asked for a courtesy credit card for the other party, only the original card applicant is liable for the credit card debt.

But, you could be responsible for the other party’s debt if you both agreed to be jointly responsible for the debt, or if the couple had registered as domestic partners in a state that legally recognizes domestic partners. For example, if you bought a car or house together and the loan documents state your name AND the other person’s name, you are both jointly liable to pay the car loan or mortgage. If both parties jointly applied in writing for, and received credit cards for one account, then both parties would be jointly liable for the credit card debt, regardless of who actually made the credit card purchases.

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Can a lender or creditor tell me to pay a debt if I have a court order that says the opposing party has to pay?

Yes. When more than one party agrees to be responsible for a single loan or debt, the parties are jointly and severally liable. This means the lender or creditor (bank, credit card company, mortgage company) can "go after” one or both parties to receive payment, even if a court order says specifically that one party is responsible for paying a joint debt. This is because when you get a loan or a mortgage or a credit card, you make an agreement with that company that the people on that loan or account will pay any debt. So the lender or creditor cares only about getting someone to pay. Regardless of what the court order says, there is a contractual relationship between the lender or creditor and the parties who had the debt.

To avoid that situation, if you have a court order saying you are not responsible for a debt, sometimes you can refinance the loan to get your name off to make it clear that you are not responsible for the debt any more. If the opposing party isn’t cooperating with the refinance, you can file a motion asking the court to order the opposing party to refinance the loan.

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Does common law marriage exist in Alaska?

No. Many people believe that if you are in a relationship with a person for a long time, you’re automatically married – that you have what is called a common law marriage with the same rights and responsibilities of a couple who has been legally married. This is not true in Alaska because common law marriage is not recognized here.

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Civil Rule 26.1

Civil Rule 26.1 is the court rule that requires each spouse to:

You must give your information to the other side within 45 DAYS of the answer being filed - usually about 2 months after the case has started.

You do not file this information with the court, rather you exchange it with one another. This information is to help you prepare a fair and equitable property and debt division for the divorce.

If the other party does not do what they are supposed to do under this rule, you may file a Motion To Compel Rule 26.1 Disclosure and/or Release. Please see the motion practice page for more information on filing motions.

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Other Types of Discovery

There are many other formal rules of discovery to assist in gathering information from the other party. In family cases, Civil Rule 26.1 is generally sufficient, however sometimes parties do use the mechanisms set out in Part V. of the Civil Rules, which covers Rules 26-37.

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Rev. 6 January 2014
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