I had a car before I got married, and my car started giving me problems. My spouse suggested that we let my car go and get another car. We put the car in her name due to my credit problems, but I have paid all the car notes. Now we are divorced, and she wants to take the only transportation I have. Can she do this?
Well, as with most issues, it depends. Each state’s laws vary, but generally speaking, if you live in a community property state (Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), all property - including cars - purchased after the date of marriage and before a separation or divorce will be considered jointly owned or “community property,” and will be divided evenly (or 50-50) in a divorce.
If you live in an equitable distribution state (all other states), judges don’t have to divide property equally, but rather in a way they believe is equitable and fair.
But how do you divide a car? Well, you don’t. Not all property can be divided physically, but divorcing couples can share or split the value of property, again depending on state law.
In community property states, judges generally divide the value of community property equally. So, for example, if a couple owns a car that has a Kelley Blue Book value (fair market value) of $5000, each spouse is entitled to 50% of the value of the car, or $2500. Whoever keeps the car should buy the other spouse out with cash or a transfer of some other property worth $2500. Keep in mind however, that if any debts or reimbursements are owed between the spouses, those will come into play when it’s time to true up the division of property and debts.
In equitable distribution states, judges divide property equitably, but not necessarily 50-50. If one spouse wants to keep a car purchased during the marriage, he or she can try to explain to a judge why that would be a fair result. It’s possible that spouse has a greater need for the car - in order to get to work or take the kids to school. In the end, the judge strives to reach an equitable result. A judge may award the car to the spouse that needs it the most and order that spouse to pay the other 50% of the value, or some other percentage that’s fair under the circumstances.
The second issue is that only your wife’s name is on the title. In some states, title can be a major factor in deciding who owns what property, but it doesn’t necessarily end the analysis. In California, for example, title alone isn’t enough. If community funds are used to purchase and pay down property, then it should be divided equally at divorce, even if titled in only one spouse’s name. Similarly, in equitable distribution states, judges do not simply give each spouse the property that is titled in his or her name – they will often look beyond title to determine what an equitable division of property and debts should look like.