In Iowa, the court generally accepts a fair and reasonable property division the parties agree to, but if the parties cannot agree, the property is divided by the District Court within the Judgment of Divorce.

Iowa is an equitable distribution state. When the parties are unable to reach a settlement, the District Court does it for them. Equitable does not mean equal, or even half, but rather what the District Court considers fair. Since Iowa is an equitable distribution state, the court divides all marital property unless the spouses agreed otherwise. Of course, if possible, a couple should divide and distribute the assets and liabilities themselves, but when a couple cannot agree, the court decides.

Division of property does not necessarily mean a physical division. Rather, the court awards each spouse a percentage of the total value of the property. It is illegal for either spouse to hide assets in order to shield them from property division. Each spouse gets items whose worth adds up to his or her percentage.

According to Section 598.21 of the Iowa Code, the court shall divide all property, except inherited property or gifts received by one party, equitably between the parties after considering all of the following:

However, Iowa is one of eight jurisdictions that include separate property in the marital estate providing the court finds a special showing of need by the non-titled spouse.

Marital property includes all earnings occurring during the marriage and everything acquired with those earnings. Unless the creditor is specifically looking to the separate property of one spouse for payment, debts incurred during marriage are marital. Separate property means gifts and inheritances given just to that spouse, personal injury awards received by one spouse, and the proceeds of a pension that vested (that is, the pensioner became legally entitled to receive it) before the marriage. Pensions purchased with a spouse's separate funds remain separate property. A business owned by one spouse before the marriage remains his or her separate property during the marriage, although a portion of it may be marital property as a result of the effort of both spouses.

According to 598.21 of the Iowa Code, separate property is property inherited by either party or gifts received by either party prior to or during the course of the marriage. Separate property is not subject to a division, except upon a finding that not dividing it is inequitable to the other party or to the children of the marriage. Property purchased with a combination of separate and marital funds is part marital and part separate, as long as a spouse is able to show that some separate funds were used. Non-marital property mixed together with marital property generally becomes marital property, however.

The court goes through discovery, classifying property and debt that is to be considered marital or separate. Then it assigns a monetary value on the marital property and debt. Finally, it distributes the marital assets between the two parties in an equitable fashion.

During the divorce, if the couple has no children and the house is the separate property of one of them, that spouse has the legal right to the property. If there are no children and the house is jointly owned, the spouses can go to court for a temporary decree setting forth the rights and responsibilities of both parties as relates to their financial assets and liabilities. The temporary decree remains in effect until the court issues the final decree.

In Iowa, as in many jurisdictions, the equity in the marital home is often one of the biggest assets the spouses divide. The equity is the market value of the house, less any debts or liens against it. Equity is established by determining what the current market value of the home is at the time of separation. Once the spouses agree to a current market value, any debts associated with the property (mortgage, taxes, home equity loans, etc.) are deducted from the market value to arrive at the equity to be divided. Normally, making this calculation requires a paid real estate appraisal or a real estate agent can prepare a market analysis for free.

From there, couples choose one of three options to divide the equity:

In Iowa, vested pensions are marital property. A pension vests when all the requirements to receive the pension have been met. Unvested pensions are also marital property. Until the pension has vested, the person under whom the pension is maintained has only an expectancy of interest in the pension.

Several different methods of valuation are used in determining how much a marital asset is worth, depending upon the asset to be valued and the level of agreement between the parties. Courts generally accept the value when the spouses mutually agree on a value of a particular asset. Experts may be retained by the parties or by the courts to determine the value of marital assets if the parties cannot agree. Such experts may include accountants, real estate or business appraisers, or pension valuators. The use of experts adds to the cost of the divorce.

In Iowa, if spouses share in each others retirement or pension plan, a Qualified Domestic Relations Order must be completed. A QDRO is a written set of instructions that explains to a plan administrator that two parties are dividing pension benefits. The instructions set forth the terms and conditions of the distribution - how much of the benefits are to be paid to each party, when such benefits can be paid, and how such benefits should be paid.