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Rhode Island Property Division
Property Distribution Laws in Rhode Island
In Rhode Island the courts generally accept a fair and reasonable property division the parties agree to, but if the parties cannot agree, the Family Court divides the property within the Judgment of Divorce.
Rhode Island is an equitable distribution state, using the dual classification system. When the parties are unable to reach a settlement, the Family Court distributes the marital assets between the two parties in an equitable fashion. Equitable does not mean equal, or even half, but rather what the Family Court deems fair.
The court decides based on a set of factors designed to show the complete picture of how each spouse contributed or damaged the marriage, and what each spouse requires to move forward after divorce.
Factors in Equitable Distribution
According to the General Laws of Rhode Island - Title 15, Chapter 15-5-16.1, in awarding property, the court considers:
Rhode Island is a no-fault state, but the judge can still consider bad behavior like an affair or abuse in dividing the spouses’ property. Evidence of fault can shift the distribution of property, sometimes significantly, in the innocent spouse’s favor. For example, in one Rhode Island case (cited below) the court gave the wife 80% of the marital property where her husband was abusive and had extramarital affairs. Consequently, a spouse who causes the marriage to fail may end up paying for his or her infidelity or abuse, if such a distribution would be just and proper. The case where the court split the marital property 80/20 in light of the husband’s abuse and affairs, is DeAngelis v. DeAngelis, 923 A.2d 1274 (RI S.Ct. 2007).
The court also assigns marital debt. Like property, before dividing a debt the judge characterizes it as either marital or separate based on when it was acquired, who acquired it, and how it was used. Foolish dissipation of marital assets that creates debt is one of the considerations in dividing the marital estate.
Marital Property vs. Separate Property
Before the court can divide property, the judge needs to know which property belongs to the marriage, which belongs to each spouse separately, and how much there is of each.
Marital property is property acquired or earned during the marriage. Property used for the benefit of the marriage or shared with the other spouse, even if it started out as separate property, may become marital property. All the marital property must be divided between the spouses when the marriage ends. Generally, separate property is property owned by one spouse before marriage, including gifts given only to one spouse or an inheritance.
In Rhode Island, the court can include non-marital property in the division, but only under certain circumstances. When separate property appreciates because of joint efforts, the appreciation may be divided between the spouses. Any income received from separate property during marriage is also considered marital property and subject to division.
However, if the property belongs to one spouse and he or she has not transferred it to a joint account or otherwise commingled it with another marital asset, then it remains separate property. Likewise, any gift or inheritance received during marriage is separate property.
Property is either marital or separate, and it includes assets and liabilities. The most common types of property divided at divorce are real property like the family home, personal property like jewelry, and intangible property like income, dividends, and benefits.
Valuing and Dividing Property
First, the court classifies assets and liabilities, property and debt, as marital or separate. Then it assigns a monetary value to the marital property and debt. Finally, it distributes the marital assets between the two parties in an equitable manner.
The Marital Home
In Rhode Island 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:
Pensions and Retirement Accounts
In Rhode Island 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 Rhode Island the court may include the retirement benefits and plans earned by both spouses as marital assets available for division. Retirement benefits vary greatly but can generally be divided into two groups:
In Rhode Island if spouses share in each other’s 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.
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