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How do courts divide investment incomes in a divorce?

On Behalf of | Jan 3, 2024 | Property Division |

Navigating through a divorce can be overwhelming, especially when dividing assets. One significant property concern divorcing parties have is the division of investments and their incomes. Understanding how courts handle the intricate process of splitting investment incomes can help protect your property rights and set expectations.

Period of occurrence is crucial

When dividing properties in a divorce, Alabama courts only consider marital assets or those properties the spouses acquired during the marriage. With a few exceptions, properties parties acquired before the marriage are separate and are individually owned.

This applies to investments and income they earn. If the spouses acquired the investments during the marriage and they earned income in the same period, then it becomes part of the property division process. However, if before being wed, the parties acquired investments which gained earnings during the marriage, it becomes a trickier matter, requiring guidance from a skilled legal professional and a financial expert.

It should be fair and equitable.

In Alabama, courts distribute marital properties between spouses fairly and equitably. What qualifies as fair and equitable will depend on the unique factors surrounding each case. Accordingly, how the courts divide investment incomes depends on the available circumstances. For some cases, a 50-50 split may be fair, while for others, an unequal division might be what is equitable.

Dividing investment income in a divorce requires a fair approach. Hence, courts consider various factors to ensure an equitable split. Understanding these principles can help manage your expectations and facilitate a smoother transition to financial independence after divorce.