Montana Divorce: Dividing Property

Are you wondering how assets and debts are divided in a divorce case in Montana? Here's how.

If you are getting divorced in Montana, do you know what property you get to keep and what you have to split with your spouse? Who will be responsible for the debts you and your spouse incurred during the marriage, or even before you got married?

Equitable Distribution

Montana is an equitable distribution state. Equitable distribution means that the marital property will be split between spouses in a way that is equitable, or fair. The court decides what’s fair based on set of factors that shows the complete picture of how each of you contributed to the marriage and what each spouse will need to move forward after divorce. The division does not have to be equal to be fair.

A court does not need to get involved in dividing your property, however, if you and your spouse can resolve disputes over property yourselves, or with the help of lawyers or a mediator. Throughout the divorce process, the spouses will have opportunities to decide how they want to split their property between themselves. The court will usually accept a written separation agreement that details the spouses’ preference. It is only where you could not reach a compromise with your spouse that the court will step in and divide your property for you.

Learn more about Divorce in Montana.

Both Marital and Separate Property Will be Divided

Before the court can divide your property, it needs to know which property belongs to the marriage, which belongs to the spouses separately, and how much there is of each. Generally, marital property is all property acquired or earned during the marriage, regardless of what title says. Separate property is property you owned before marriage. It also includes certain property you receive during marriage, like a gift, an inheritance, or new property in exchange for the separate property you had before. For example, if you sold the land you had before marriage and used the proceeds to buy a rental property during marriage, then the rental property remains your separate property. If that rental property increases in value, then that increase also belongs to you alone.

The distinction between marital and separate property is important even though the court will divide both types at divorce. The court may use your separate property to compensate your spouse if you did something to dissipate – or harm – either type of property. You can’t go on a wild shopping spree and run up debt on a joint credit-card, for instance, or mortgage your property to pay for an exotic car you could not otherwise afford, without having to pay for it later when the court divides the property that’s left.

Likewise, the court considers the non-monetary contributions of the homemaker spouse to be meaningful when distributing the separate property. If you were a homemaker during marriage, the court will look at how your work benefited the maintenance of any separate property. Keeping with the example of the rental property above, if you took care of the home and children so your spouse could find tenants and do repairs on that property, then that will count in your favor. Also, the court will consider a distribution of separate property as an alternative to maintenance (alimony) payments.

Learn more about Dividing Marital Property in a Divorce.

Factors Considered in Dividing Property

Although the court must distinguish between the marital and separate property, at division the court includes all the property regardless of when you acquired it or what the title says. To distribute the property equitably, the court will ignore either spouse’s fault in causing the marriage to fail. It will look at the length of the marriage and the spouses’ ages, health, occupation, and income. The court also considers the spouses’ skills and employability, and any liabilities.

Liabilities, or debts, must be divided at divorce. Before dividing a debt, the court will have to characterize it as either marital or separate and then assign responsibility for it based on the same equitable principles applied to distribution of assets.

If there are children of the marriage, then the court may increase the share of the spouse who has custody. Also, the court may set aside a portion of the marital or separate property for the education, support, or general welfare of the children.

Spousal Maintenance

A Montana court will award spousal maintenance (alimony) only where you can’t meet your reasonable needs because you lack sufficient property and the ability to support yourself, or where you have custody of a child whose condition makes it difficult to work outside of the home. In ordering an award for maintenance, the court evaluates many of the same factors as for the division of property. Additionally, the court will look at the time you may need to improve your education and find employment, the standard of living you enjoyed during marriage, and your spouse’s ability to pay.

Sources

You can read the law on division of property and spousal maintenance in the Montana Code Annotated Sections 40-4-202.

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