Although Ohio is not a community property state, it is important for married couples to be aware of community property principles in case they do eventually move to such a location. It can be difficult to think about the end of marriage when divorce isn’t even in the picture, but protecting one’s financial interests may depend on such planning. Additionally, those who are contemplating marriage and have significant assets or a business might want to consider a prenuptial agreement.
In equitable distribution states like Ohio, assets acquired during the marriage are subject to division in a divorce. Under this principle, the court will take into account various factors in deciding how those marital assets are to be divided fairly. This may mean that one spouse receives more than half of the property. In a community property state, assets accumulated during a marriage are divided equally. However, there are some exceptions to this equal division. For example, an inheritance received by one partner is typically viewed as separate as long as the funds are not commingled.
Spouses divorcing in a community property state will want to be aware of their rights related to retirement accounts and businesses. For example, the funds accrued in a retirement account would be equally owned by both spouses, and provision for their distribution would need to be formalized. Both parties would also be entitled to half of any businesses owned, which could create financial challenges if one party wanted or needed to buy out the other’s interests.
Although court-ordered property division terms could be frustrating, it is possible for a married couple to reach an amicable agreement subject to the court’s approval. Separate legal representation may be important to ensure that the agreement is fair.