While ending a marriage with your companion can be emotionally, financially, and mentally tiring. Next comes the matters associated with child custody and division of marital assets are the concerns faced by the people in Kentucky.
A Kentucky state law determines how a couple will split their assets after divorce; whether the state is a separate property state or community property laws state is also essential. Thus, is Kentucky a community property state?
The bankruptcy attorneys comprehend Kentucky’s marital and divorce asset division laws. We understand that you are facing the most difficult times of your life, and dividing the assets might take a financial and emotional toll on you.
I can help you with legal matters and will ensure that the division has the least financial entanglement on you. Contact my law firm now and book a free consultation session for helpful legal assistance.
Community Property – What Does it Mean?
Community property is related to the assets or property acquired by the people when they are married, meaning that the assets belong to both. Regardless of which partner bought them, these assets or debts are accrued.
The states that obey the community state laws divide these assets evenly among the spouses when the couple goes through the divorce.
Kentucky Marital Assets Separate or Community Property?
Kentucky obeys the separate property statute. While the state court fairly divides a couple’s marital assets; however, they don’t always split everything from the middle.
Kentucky Community Property Recognization
Kentucky is an equitable distribution state, but the Community Property Trust Act acted out in July 2020. According to the Community Property Trust Act, married couples are allowed to declare part or all of their assets as community property. The property is then placed in the Kentucky community property trust.
Kentucky also enacted the Uniform Disposition of Community Property Rights at Death Act; according to this, if two people are getting married in a community property state and relocate to a separate property state, they can retain their pre-existing property rights. This act helps the widowed partners as it applies to the surviving spouse and the deposition of the couple’s real and personal property.
Community Property Trust Kentucky
A couple in Kentucky can opt for community property treatment by creating a valid trust. However, the married partners must ensure these laws build a valid and applicable community property trust.
- The trust document agreement must state that it acts as a Kentucky community property trust
- A married couple, whether both or any one of them, must transfer their assets to the trust
- A capitalized warning must also be stated with the far-reaching legal ramifications of trust and its impact on the married couple’s rights.
- The signature of both spouses must be present on the trust document
- Both or any one of the spouses can be trustees; however, one of them must be a Kentucky resident. A trustee should also be a bank or trust company.
Which Property is Considered Marital Property in Kentucky?
Property division and splitting up the assets can quickly become a significant point of contention when two partners decide to get a divorce. Before considering the matter by the court, the partners need to determine whether it is separate property (owned by any one of them before marriage) or joint property (bought by them when they got married). After this analysis, the court will divide the property equitably.
Separate Property
Separate property division or non-marital property division is not available when the spouses decide to divorce each other. It often becomes a source of disagreement. The separate property includes:
- Gained the property while in marriage in exchange for or selling the separate property
- Set apart as separate as per the pre-marital agreement
- Acquired by any one of them before getting married
- Gifted or given by the third person to any spouse
- The spouse inherited that property during the marriage
According to the Kentucky property division legislation, the separate property rights might be lost by the partner if they mix the property or comingles acquired separately with the marital property.
For example, if a partner gets money inherited and deposits it in a joint account with the spouse, such inheritance money is no longer considered a separate property. The rule also applies to the spouse’s pre-marital bank accounts if both use the same bank account.
In addition, married partners can convert the separate property status to marital property by converting its title from individual to joint ownership. If such a thing happens, the court declares the spouse gifts the property in marriage.
Marital Property
Any asset or property not secured by one partner before marriage or separate will be regarded as Marital Property. According to Kentucky law, this property will be divided equitably. The marital property in Kentucky includes:
- Assets, including separate homes or businesses whose value is appreciated at the time of marriage due to marital contributions. For instance, a rented residence whose value increased after getting married because the spouses spent on it.
- Retirement assets, money, real estate, and other non-separate property acquired by any of the partners at the time of marriage.
- Property co-owned by comingled or spouses and owned before marriage, like real estate.
Property Division in Kentucky
The division of property is more about just real estate and vehicles. The court should also divide the bank accounts, cash, debts, and retirement accounts fairly. However, spouses are offered different ways to divide their property in Kentucky.
The first option is to settle their issues about the assets and property outside the court; however, their decision is still reviewed by the court. Typically, the judgement is approved when the spouses receive legal consultation. Moreover, the court helps couples judge if they can’t decide for themselves.
Sometimes, one spouse receives the higher share in the property when the judge goes through the following aspects:
- Length of the marriage
- The economic situation of spouses, including considerations associated with the custodial parent like whether they reside in a family home with the children
- The value of the property awarded to each spouse
- Spouse’s contribution to obtaining the marital property, including the stay-at-home spouses.
Experienced Bankruptcy Divorce Lawyers Can Help You to Deal with the Situation!
My legal team and I are dedicated to getting you out of such a situation and understanding the two property regimes that factor into property division. Our compassionate and trusted property attorneys are always here to help you throughout this challenging time.
Call us at 502-625-0905 or book a free consultation session now to get your options about your legal situation.
Resources for Bankruptcy
Louisville, Kentucky Bankruptcy Forms
Chapter 13 Plan Modifications in Louisville, Kentucky • Video
Mortgage Modifications • Foreclosure Failures
Convert from One Bankruptcy Chapter to Another
Voluntarily Dismissing a Chapter 13 109(g)(2) and Refiling • Video
Chapter 13 Hardship Discharges in Bankruptcy
If you are considering bankruptcy, don’t delay because timing is crucial. I am here to help you. So, contact my office right away to start the conversation. Nick C. Thompson, Bankruptcy Lawyer: 502-625-0905.
