Under Kansas state law, the courts will divide assets and debts in an “equitable division.” An equitable division does not mean that assets and debts are equally split, but in most cases, it generally does.
One of the initial steps taken when making an equitable division of property is to determine all the assets and debts that both spouses have. In Kansas, it is not important how the property or debt is titled. This means that even if the home both spouses live in is titled solely in one spouse’s name, the other spouse still has an interest in the amount of equity in that home that was accrued during the length of the marriage. That amount of equity is subject to an equitable division. Pursuant to the Johnson County Family Law Guidelines, all property owned by married spouses, whether acquired during or prior to the marriage or owned solely by one spouse or both, becomes marital property the moment one spouse files for divorce or annulment.
The Discovery Process
When determining the assets and debts of the spouses involved, an important tool is the discovery process. Discovery is the legal term that describes the process used to obtain information that is pertinent to the divorce. Generally, an interrogatory or request for production of documents is sent to the opposing spouse, or the spouse’s attorney, if he or she is represented. Interrogatories ask a specific set of questions that are related to the issues in the divorce proceeding. Some attorneys use a standardized discovery that is not tailored to each individual case. This is probably not the best practice, and discovery should be tailored to be as concise and efficient as possible. Interrogatories should be designed to lead to discoverable information relating to bank accounts, credit accounts, loans, real property, personal property, retirement, and investment accounts. This is to gain an understanding of all assets and debts the other spouse has ownership of.
A request for production of documents will also be sent. This type of discovery asks for physical objects, such as a bank statement, or requests the opposing spouse to make real property available for inspection. These requests are tailored to each specific case. Requesting documentation relating to assets and debts of the opposing spouse allows an attorney to grasp a full understanding of what all the marital estate. After discovery, the attorney will have a better understanding of what an equitable division of the marital estate would look like.
The Role of Marital v. Non-Marital Property
While courts have the ability to divide all property owned by either spouse, the court does still recognize the difference between marital and non-marital property when deciding how to divide the spouses’ property. The discovery process helps distinguish marital and non-marital property. During the discovery process, the premarital value of an asset and its value on the date the divorce petition was filed is learned. If there is some premarital value to an asset, that amount is credited to the spouse who had the premarital value invested in the asset, and the amount of equity in the asset that accrued during the marriage will be divided between the spouses.
After an interrogatory or a request for production of documents is sent, the opposing spouse will have a set amount of time to respond or object. After the interrogatories and request documents are returned, the attorney will create an “Asset Debt Spreadsheet.” This is a tool used by attorneys to determine how a couple’s assets and debts will likely be distributed in a divorce proceeding. The spreadsheet contains a column for each asset and debt from both spouses. Any premarital values will be deducted from the marital amount. For any real property that exists, an appropriate amount for closing costs will be determined, and any amount mortgaged against the property will also be deducted. This same process is used for any personal property, such as vehicles. Retirement and investment accounts are calculated by taking the value on the date of the divorce petition filing, deducting any premarital value, and then deducting any appropriate tax deduction if the account will be subject to taxation upon distribution. All other assets and debts are included on the spreadsheet.
Final Distribution of Property
Finally, the spouses and their attorneys must decide which assets and debts will go to which spouse. Some assets will be sold, and the proceeds split. At other times, one spouse will maintain the property or take control of a certain debt. After determining this, the value of each asset and debt is placed in a column under either husband or wife, and each column is added up. After totaling each column, if there is a discrepancy in value each spouse is receiving, the difference will be divided and awarded to the spouse receiving less as an equalization payment. For example, if the wife has $100,000 worth of property and the husband has $50,000, the two numbers are subtracted from each other ($50,000) and divided by two ($25,000). Then, the party with the lesser amount of equity (the husband) is awarded the $25,000 as an equalization payment. This allows both parties to leave the marriage with the same amount ($75,000), in addition to any asset/debt they were assigned.