Laws governing division of marital property in divorce vary from state to state. Iowa law requires that a division be equitable, which means that it must be fair but not necessarily equal. Some couples are able to agree on their own about how to divide property, while others use the help of attorneys or a mediator to negotiate a settlement. Couples who don’t manage to resolve property issues will end up going to court to ask for a decision from a judge. A judge dividing property in an Iowa divorce will consider all relevant factors, including the following:
The first step in the division process is deciding whether property is marital or separate. Marital property includes most assets and debts a couple acquires during marriage. Property is separate if a spouse owned it before marriage or acquired it during marriage by gift or inheritance or after separation.
A spouse can convert separate property into marital property by changing title from individual to joint ownership, in which case a court would presume that the spouse intended to make a "gift" of the property to the marriage. Marital and separate property can also be mixed together—sometimes called "commingling." Some couples combine their separate assets intentionally; others do so without intending to. For example, a premarital bank account belonging to one spouse can become marital property if the other spouse makes deposits to it, or a house owned by one spouse alone can become marital property if both spouses pay the mortgage and other expenses.
If the spouses aren’t able to decide what belongs to whom, the judge will have to decide whether any or all of the commingled property was a gift to the marriage or whether the original owner should be reimbursed in whole or in part. These situations can be very complicated and may require the assistance of an attorney.
Separate property is not ordinarily subject to division in divorce, but a judge in Iowa does have the option of including it if not including it seems unfair either to one spouse or to the couple’s children.
After determining which property is marital property, the couple, or the court, will assign a monetary value to each item. Couples who need help determining values can hire professional appraisers. Some financial assets, such as retirement accounts, can be very difficult to evaluate and may require the assistance of a financial professional, such as a C.P.A. or an actuary.
Spouses can divide assets by assigning certain items to each spouse, possibly with an equalizing payment if one spouse gets more than the other, or by selling property and dividing the proceeds. They can also agree to continue to own property together—most people don't want this type of ongoing engagement with the person they're divorcing, but some couples do agree to keep the family home until children are out of school. Others may keep investment property in hopes it will increase in value.
The couple must also assign all debt accrued during the marriage, including mortgages, car loans and credit card debts, to one of the spouses.