One of the most important things divorcing spouses have to decide is how to divide their marital assets and debts. If they can’t decide for themselves how to do it, a family law judge will have the final word. Understanding the basics of New Mexico asset division law will help you prepare for your divorce. When you’re ready to get started on your case, Attorney Bob Matteucci is here to work with you.
How is asset division handled in New Mexico divorces?
New Mexico is a community property state. This means there is a presumption that any property acquired during the marriage is owned equally by both spouses (regardless of who has the title on it). At divorce, community property will be divided equally between the spouses.
Some of the most common types of community property are items like:
- Appliances and furniture
- Bank accounts
- Stocks and investments
- Retirement accounts
- Business properties
The presumption regarding community property is rebuttable, meaning that a spouse can show that certain items are his or her separate property. A few examples of separate property are:
- Property owned before the marriage
- Pain and suffering damages awarded in a personal injury case
Debts incurred during the marriage are also presumed to be marital, and shall also be divided 50/50. Sometimes there are debts that will be considered separate, for example, those that arise in connection with a separately owned piece of property.
What is commingling and how it might affect my case?
Separate property is generally considered to be the right of whichever spouse owns it. But there are cases in which separately owned items can become community property. That’s where the concept of commingling comes in. This occurs when the separate property is commingled, or mixed, with community property and it’s no longer possible to distinguish it. For example, a spouse may have inherited $10,000 from a relative, which is separate property. But if the spouse deposits that money into a jointly owned bank account and then starts using it to remodel the house, the money will likely be considered commingled.
Of course, this is a simplified example of how commingling works. In reality, it can be quite complicated and involve significant assets – and debts – fought over by the couple. If you have questions about whether commingling might affect your separate property, be sure to ask your attorney.
What are the steps of asset division?
Before you begin working with your attorney on dividing property, it’s a good idea to start compiling a list yourself. Write down everything you and your spouse own, including any debts. Be sure to include items you believe will be considered separate property or debt. And do the same for properties and debts you think your spouse will own.
Your family law attorney will then work with you through the following steps:
Identification. Bob will start by discussing the property and debt you have listed, and make sure you’ve considered everything. Spouses often forget that they own bank accounts at certain banks, or they don’t think about vehicles their children drive but which they own. All property and debts will need to be accounted for in court.
Classification. The court will then categorize each piece of property and each debt as either separate or marital. Some items are relatively simple to classify, but others can lead to heated disagreements between the spouses. Either way, this is a necessary step that every case must follow. Your attorney will make note of which items are disputed and on what basis.
There are a number of factors that can complicate this step. Commingling, as mentioned above, is one. The terms of a prenuptial agreement can also make it difficult to decide whether the property should be viewed as separate or community.
Valuation. The next step is to assign a total value to the community property. Spouses frequently disagree over the total value of the marital estate and sometimes accuse each other of undervaluing or overvaluing specific assets.
To assist with the valuation, your attorney will need to review bank statements, credit card statements, tax returns, loan records, deeds and titles, and any number of other documents. A property appraisal will also likely be needed, especially for real estate.
Distribution. Finally, the court will evenly (50/50) distribute the assets and debts between the spouses. This is done regardless of marital fault since New Mexico is a no-fault divorce state. One spouse may get the marital residence, while the other is distributed the vehicles and bank accounts. The court will determine how best to distribute the property.
Issues that Arise in Asset And Debt Division
Though the process of dividing marital assets and debts may seem simple enough, the reality is often far different. Here are some common issues that could come up in your case:
Hidden assets. When a spouse is accused of hiding assets, further investigation may be necessary to learn more. Your attorney can use a number of discovery tools, like interrogatories, to uncover hidden assets.
High-value assets. Where the value of a significant asset is in contention, you may need to consider bringing in an expert witness. A knowledgeable divorce attorney can advise as to whether this is a good idea for you.
Is settlement possible? Most asset and debt division cases settle without the need to go before a judge. Bob will examine whether mediation or other out-of-court methods may work for your divorce. Roughly 85% of family law cases never go to court. Good attorneys will work hard to negotiate a very good settlement without going to court.
Contact a New Mexico Divorce and Asset Division Attorney Today
Asset and debt division can be one of the most complex aspects of your New Mexico divorce. You need an attorney in your corner who is dedicated to making sure your rights and interests are protected throughout the process. You need Bob Matteucci at your side. Contact Matteucci Family Law today.
Matteucci Family Law Firm helps families with asset division matters across New Mexico including Albuquerque, Santa Fe, Los Lunas, and Rio Rancho.