Property FAQs

What is the standard for dividing property in Ohio?
Each spouse shall be considered to have contributed equally to the production and acquisition of "marital property." The laws of the State of Ohio require that the division of "marital property" must be equal, unless such a division would be inequitable. In such a situation, the court must divide the property equitably instead of equally.

What is "marital property?
"Marital property" means, all of the following:
a.  All real and personal property that currently is owned by either or both of the spouses, including, but not limited to, the retirement benefits of the spouses, and that was acquired by either or both of the spouses during the marriage;
b.  All interest that either or both of the spouses currently has in any real or personal property, including, but not limited to, the retirement benefits of the spouses, and that was acquired by either or both of the spouses during the marriage;
c.  Except as otherwise provided, all income and appreciation on separate property, due to the labor, monetary, or in-kind contribution of either or both of the spouses that occurred during the marriage;
d.  Participant accounts in state and municipal deferred compensation plans, to the extent set forth in the applicable statute.

"Marital property" does not include any "separate property."

What does the term "during the marriage" mean?
"During the marriage" means whichever of the following is applicable:
a.  the period of time from the date of the marriage through the date of the final hearing in an action for divorce or in an action for legal separation; or,
b.  if the court determines that the use of either or both of the dates specified above would be inequitable, the court may select dates that it considers equitable in determining marital property. If the court selects dates that it considers equitable in determining marital property, "during the marriage" means the period of time between those dates selected and specified by the court.

How does the court determine how to divide the marital property?
In making a division of marital property and in determining whether to make and the amount of any distributive award, the court shall consider all of the following factors:
a.  The duration of the marriage;
b.  The assets and liabilities of the spouses;
c.  The desirability of awarding the family home, or the right to reside in the family home for reasonable periods of time, to the spouse with custody of the children of the marriage;
d.  The liquidity of the property to be distributed; The economic desirability of retaining intact an asset or an interest in an asset;
e.  The tax consequences of the property division upon the respective awards to be made to each spouse;
f.  The costs of sale, if it is necessary that an asset be sold to effectuate an equitable distribution of property;
g.  Any division or disbursement of property made in a separation agreement that was voluntarily entered into by the spouses;
h.  Any other factor that the court expressly finds to be relevant and equitable.

How does the court determine the value of a marital asset?
Obviously, some assets have a readily ascertainable value, such as a bank account, publicly traded stock, etc. If the parties can not agree on the value of other assets, there must be a determination of the value in order for the court to be able to make an informed determination. The value of assets such as homes, cars, jewelry, etc., can be determined by obtaining appraisals from qualified experts. The value of pensions and retirement accounts may also be determined from an evaluation. Assets such as the value of a business, is often more troublesome. In those situations it is usually necessary to retain the services of accountants and other experts to do financial evaluations. This process can often become relatively expensive and time consuming. Unless the parties agree to accept the value determined by one expert, the court will have to take evidence and testimony and make a determination based upon the evidence as to the value of the property.

Is a professional license or degree an asset subject to valuation and division?
No. Although other states have ruled otherwise, Ohio has determined that the license or degree is not an asset subject to division. The future value of a professional degree or license earned during the marriage is, however, a factor to be considered by the court when making a determination with regard to spousal support.

What about retirement accounts, pensions and other deferred compensation?
The retirement benefits of the spouses, including IRA's, 401-K plans, pensions, deferred compensation, etc. are considered marital property and subject to division by the court to the extent that it was acquired by either or both of the spouses during the marriage.

Divorce and Your Real Estate
Disposition of the family home frequently causes problems in a divorce. Custodial parents may want to hang onto the home for the sake of the children. Perhaps one or both spouses can't afford to purchase a similar replacement home. Much depends upon the amount of equity in the home and the ability of each spouse to keep it.

For most couples the family home is the highest valued asset they will have to divide in their divorce. Its division is usually fraught with controversy for varying reasons. It may be difficult to value, is not readily converted to cash, costs a substantial amount of money to maintain and has implications of federal and state tax liability. As if all those things were not enough, your family's emotional attachment to your real estate, in particular a family or vacation home, can cause you to make an irrational or poor decision at the time of the divorce. Your family may be haunted by that decision for years after your divorce.

Some questions that you need to answer are:
a.  Should you sell the family home?
b.  Do you keep it until the children are grown?
c.  Should you keep the home and buyout your soon to be ex-spouse, or vice versa?
d.  Can either of you afford to keep it after the divorce?

The answers to these questions and others can help you avoid or plan for problems associated with your real estate. Historically, the family home is the asset that most often causes controversy both before and after a divorce.

The principal reason for this problem is the timing of the sale of the home and the division of the net proceeds. Both events frequently occur some time after the divorce. In addition, couples seldom plan as they should for the payment of household maintenance and upkeep during the pendency of the divorce. At first glance the family home appears to be the easiest asset to identify and describe. For purposes of a divorce, the description of your ownership interest in your home and other real estate can be very complicated with pitfalls for the unwary. As with the division of personal property, the rules and laws regarding the division of real estate vary from state to state. Consult with your lawyer about your rights and responsibilities after you have read this section and put together your worksheets.

Before you see your lawyer, gather the necessary documents and records about each piece of real estate. Get the documents not only for the property titled in your name, but for all the property in which you or your spouse has an ownership interest. This includes property that you own in either of your names alone, jointly with another person or property owned by a trust or business in which either of you have an interest.

Key Factors
There are six key factors about your real estate that affect the handling of the asset or the distribution of the net proceeds from the sale of the asset in a divorce. The factors are:
1.  identification of the type of real estate and the type of ownership interest you have in the property
2.  the ownership history of your real estate
3.  real estate, income and capital gain taxes
4.  debts, such as loans and tax liens, that are secured by the real estate the value of the real estate
5.  the plans you must make to pay for and maintain the real estate during the pendency of the divorce and afterward
6.  The following sections describe in detail these six factors.

Identification
As previously mentioned, most couples own an interest in real estate in the form of a family home. Other types of real estate that you may own are vacation property, rental property, commercial or office buildings, buildings on land leases, vacant land, mineral rights and other types of special use real estate. Whatever type of real property you may own, each one has unique features that could affect how you can utilize it in your divorce, especially in the context of a settlement agreement. The following sections of this chapter contain examples of some of the methods you might use.

How you hold title to the real estate may determine, in large part, what interest you and your spouse have in the real estate. Most married couples own property as tenants by the entirety and each spouse has an undivided one-half interest in the property. A divorce ends the ownership in tenancy by the entirety. Joint tenancy is similar to tenants by the entirety except that the owners are usually not married to one another. In joint tenancy and tenants by the entirety, if one of the owners dies, the deceased person's interest passes to the other owner by operation of law. Another way of holding title is as tenants in common. The interest owned by each tenant in common is divisible and can be inherited by the owner's heirs. This is customarily the way that unrelated persons, including divorced people, own real estate together. It may be the way that you and your ex-spouse own your real estate after the divorce.

History of Ownership
It is important to establish and document the history of your real estate ownership because each parcel's history affects the property's net worth. For example, real estate has tax implications that are usually assumed by the person receiving it in a divorce. Additionally, the history of your real estate helps you determine if the real estate that was owned before the marriage or inherited during the marriage is marital or separate property. Finally, the history of the land usage enables you to analyze the financial and environmental risk, if any, you could incur from owning the property.

Prepare a history of your home ownership for each property you have owned, including those which you have sold. Make notes about any miscellaneous information that is important about the real estate. Put together any source documents you used to back up your information. Organize your documents so that your history table is the first document in your real estate file. Then attach the supporting documents in descending or ascending order to the file folder. Some of the relevant information you need for each piece of real estate is:
a.  Address, purchase price and date purchased
b.  Down payment amount and source of funds for the down payment
c.  Original loan amount and current balance
d.  List of improvements you have made and their cost depreciation claimed on any prior year's tax return
e.  Insurance proceeds received from any claim
f.  Costs to repair any damages or restoration costs
g.  Date sold, sale price, costs of sale and net proceeds