Ohio Divorce: Dividing Property

If you're getting divorced in Ohio, one of the issues you'll have to address is how you and your spouse will divide up your property. Even if you don't own a house or have retirement accounts, you may be fighting over which of you will keep the family pet, who gets the car, and who will be responsible for paying off debts. Whether or not you hope to work out an agreement, you should know how Ohio law deals with the distribution of property and debts in divorce.

Is Ohio a Community Property State

No. Ohio isn't a community property state. Instead, Ohio follows what's known as the "equitable distribution" model for dividing assets and debts during a divorce. However, unlike many other states that use this model, Ohio requires judges to divide a couple's marital property equally, unless that would be unfair. When a judge decides that an equal division would be unfair, the judge must then come up with a distribution of the couple's assets and debts that would be equitable (fair) under the circumstances (more on that below).

(Ohio Rev. Code § 3105.171(C)(1) (2024).)

Agreement Between Spouses or Equitable Division

If you and your spouse can work out an agreement on how to deal with your assets and debts, you'll have more control over the outcome of the property division. But you'll need to submit your signed, written agreement to the court so that a judge can approve it and make it part of your divorce judgment. Otherwise, a judge will decide how to divide your property. When that happens, the judge won't necessarily follow your private agreement. (Ohio Rev. Code § 3105.171(F)(8); Szerlip v. Szerlip, 718 N.E.2d 473 (Ohio Ct. App. 1998).)

Before you sign any agreement, you should know that both spouses have a legal duty to share any information they have about the nature, extent, and value of their marital property (more on that below). If your divorce judgment was based on a property agreement, but you later find out that your ex withheld information about marital assets before you signed the agreement, you may seek to set aside the judgment. (Ohio Rev. Code § 3105.171(E)(3) (2024); Wourms v. Wourms, 851 N.E.2d 553 (Ohio Ct. App. 2006).)

Marital Property vs. Separate Property

Whether you hope to reach an agreement on dividing your property or will need to have a judge do it for you, the first step is to gather and share information about all of your assets and debts. In order to do that, you need to understand the difference between marital property, which belongs to both spouses, and separate property that belongs only to one spouse.

Under Ohio law, the distinction between marital and separate property doesn't necessarily depend on the property's title—whether the title is in one spouse's name or in both of their names in a form of co-ownership. Instead, there are specific rules on what counts as marital versus separate property.

The reason for classifying marital versus separate property is that a couple's marital assets and debts are distributed between them in the divorce, while the spouses keep their own separate property except in limited circumstances (as discussed below).

(Ohio Rev. Code § 3105.171(D), (H) (2024).)

What Is Marital Property?

Under Ohio law, marital property means:

• all property—including real estate, personal property, and interest in an asset—that either or both spouses acquired during the marriage and still own (unless it falls under one of the exceptions described below for separate property), and
• income and appreciation on either spouse's separate property that has resulted from one or both spouses' financial, labor, or in-kind contributions during the marriage.

A couple's marital property might typically include their bank accounts, family home, cars, electronics, and other personal property. It also includes the portion of retirement accounts acquired during the marriage. (More below on what "during the marriage" means.)

(Ohio Rev. Code § 3105.171(A)(3) (2024).)

What Is Separate Property?

Separate property is any property (or interest in property) that either spouse acquired before the marriage. It also includes:

• inheritances a spouse received during the marriage
• gifts to only one spouse
• the "pain and suffering" part of a personal injury settlement
• any assets that the spouses identified as separate property in a valid prenuptial agreement or an agreement during their marriage, and
• "passive" income and appreciation from a spouse's separate property.

(Ohio Rev. Code § 3105.171(A)(6).)

One example may help explain the difference between income or appreciation that's passive rather than due to contributions during the marriage. Say you owned investment property before you married, and it later increased in value because of general changes in the market. That appreciation would be your separate property. However, if you or your spouse (or both of you) actively managed the property, the rental income would likely be marital property, because it resulted from your efforts. The same is true of any portion of the appreciation that was a result of improvements you or your spouse made during the marriage.

How Are Debts Treated in Ohio Divorces?

Ohio law doesn't define marital or separate debts, but the rules for assets are usually applied to debts. That means that when either spouse took on a debt during the marriage, the judge will presume that it's marital unless a spouse can prove otherwise. The mere fact that only one spouse signed for the debt isn't enough to prove that it's a separate debt rather than a marital one. (Passyalia v. Moneir, 95 N.E.3d 723 (Ohio Ct. App. 2017).)

Valuing Assets and Debts in Ohio Divorces

After listing all of your property and debts, and deciding which of them are marital and which are separate, the next step is to place a monetary value on the marital assets and determine how much is still owed on the marital debts.

You'll be able to save time and money if you can agree on the value of your property rather than have a judge decide for you. It's relatively easy to figure out how much some assets are worth, like bank accounts. But you may need expert advice to set a value on other assets, such as real estate or a business.

What Does "During the Marriage" Mean in Property Division?

When it comes to characterizing and valuing marital and separate property, states have different rules on what counts as "during the marriage." Under Ohio law, it generally means the period from the date of the marriage through the date of the final hearing in a divorce or legal separation. However, the judge may choose a different date as the "de facto" end of the marriage if the normal time frame wouldn't be fair under the circumstances.

For example, a judge may decide that it wouldn't be fair to use the final hearing date as the end of the marriage when a couple had been living separately long before then and had completely disentangled their finances. Also, a judge might use separate definitions of "during the marriage" for valuing different assets if that's necessary in the interest of fairness.

(Ohio Rev. Code § 3105.171(A)(2) (2024); Gomer v. Gomer, 86 N.E.3d 920 (Ohio Ct. App. 2017).)

How Ohio Judges Divide Property in Divorce: Factors

Whenever a judge has decided that it wouldn't be fair to divide a couple's marital property equally, the judge must consider all of the relevant circumstances in order to accomplish a fair distribution of that property, including:

• how long the marriage lasted
• each spouse's assets and liabilities
• the liquidity of the marital property—meaning how easily it could be converted into cash—and how much it would cost to sell an asset, if that would be necessarily for a fair distribution
• whether it's economically better to keep an asset (or an interest in an asset) intact rather than dividing it
• whether one spouse should be allowed to stay in the family home with the children (more on that below)
• any distribution of property that the spouses already agreed to
• each spouse's retirement benefits, and
• the tax consequences of property division for each spouse.

(Ohio Rev. Code § 3105.171(F) (2024).)

Who Gets the Family Home in Ohio Divorces?

For many couples who own houses or condos, the equity in that property is their most valuable asset. But the question of who gets the house in the divorce is about more than money. Spouses—and especially their children—often have an emotional attachment to the family home. Ohio law specifically allows judges to consider whether it would be "desirable" to award the family home to the spouse who has physical custody of the couple's children, or at least to give the custodial spouse the right to stay in the house for a reasonable amount of time. After weighing all of the factors (as discussed above), judges might decide on this option in the children's interests, to minimize the disruption in their lives after their parents' divorce. (Ohio Rev. Code § 3105.171(F)(3) (2024).)

If you're hoping to reach a property settlement agreement, you'll need to consider the pros and cons of negotiating a buyout versus selling the house and dividing the proceeds. But if neither alternative is a good option at the moment—because the "out" spouse won't have enough assets for the buyout, and it's an unfavorable time for home sales—you might consider continuing to co-own the house after the divorce.

What Are "Distributive Awards" in Ohio?

Ohio law allows judges to make "distributive awards" when it's not practical or would be "burdensome" to divide up the marital property in the normal way. A distributive award is an order for one spouse to make payments to the other spouse from separate property, but it's not a form of spousal support (more on that below). (Ohio Rev. Code. § 3105.171(A)(1), (E) (2024).)

For instance, say a judge decides to award a marital business to the spouse who's been running it. Normally, the judge would award different marital property (like the family home) to the other spouse to balance things out. But if there aren't enough other marital assets to do that, the judge might order the spouse who's getting the business to make a payment (or future payments) out of personal property to the other spouse.

Compensation for Financial Misconduct in Ohio Divorces

Ohio judges have tools for dealing with spouses who engage in financial misconduct during divorce, such as by:

• purposefully and substantially omitting any assets, debts, income, or expenses from the required financial disclosures in the divorce
• hiding assets
• dissipating (wasting) the couple's property, or
• fraudulently disposing of marital assets (such as by transferring title in the property to a sibling, in order to keep it out of the property division).

A judge may compensate the "innocent" spouse with a distributive award from the guilty spouse's separate property, or with a larger share of the couple's marital property. (Ohio Rev. Code § 3105.171(E) (2024.)

How Does Property Division Affect Spousal Support?

If one or both spouses have requested spousal support (alimony) in the divorce, the judge will address that issue only after dividing the couple's property. However, either spouse may request temporary support during the divorce process.

When deciding whether spousal support is appropriate, the judge will consider any income the spouses will receive from property awarded to them in the divorce—along with all of the other factors that go into decisions about spousal support in Ohio.

(Ohio Rev. Code § 3105.18 (2024).)

Getting Help With Property Division

If you're having trouble agreeing with your spouse on how to divide your property in the divorce, you might consider trying mediation. A trained, neutral mediator can help you identify and resolve the sticking points. The cost of mediation will largely depend on the number of issues you have to resolve and how long it takes to reach an agreement. But it's almost always far cheaper than going to trial. And if you're able to reach a comprehensive settlement agreement addressing all of the issues in your divorce, you can save even more time and money by filing for Ohio's special, streamlined dissolution of marriage process.

Also, experts such as property appraisers or pension appraisers are available to help determine the value of your marital assets. You and your spouse may agree to accept what an appraiser or other expert says about the value of any of your assets, or you may each hire your own experts. In that case, the judge will usually have to decide which of their opinions is more reliable.

When you aren't able to reach a property agreement, you should strongly consider speaking with a lawyer. Court battles over the characterization, valuation, and separation of property can be incredibly complex and difficult for lay people to navigate. An experienced family law attorney can help gather the evidence you need, bring in the right experts to bolster your case, and protect your interests in court.