PROPERTY DIVISION AND ALIMONY

Mississippi Property Division and Alimony

Property division will be a major part of your divorce. It can cause a lot of apprehension and stress, and rightfully so, because you only get one chance to get it right. Because we understand this at R+E, we put much care, consideration, and hard work into achieving your financial goals in divorce.

Most people of average wealth in Mississippi have a home, two cars, retirement accounts and some debt.  If you fall into this category, the financial aspects of your divorce will be relatively easy.  However, when the assets are extensive, there is significant debt, and businesses and business assets are involved, if you do not have a high quality team advising you about how Mississippi property division and alimony work, you are making a huge mistake.  At R+E, our diversely talented legal team can help you walk through the process regardless the number on the bottom of your personal financial statement.

Mississippi Equitable Distribution Factors

It’s important to understand “equitable” does not mean “equal.” Instead, equitable means fair. To determine what is fair, chancellors take into account several different factors and circumstances. Generally all property division is done in a step-by-step process. First, the property is either labeled as marital or non-marital. Second, the property labeled marital is then valued based on something called “fair market value.” Third, the marital property is equitably divided between the two parties. Finally, alimony is awarded to one party if necessary based on the distribution of property.

STEP 1: CLASSIFY THE PROPERTY AS MARITAL OR NON-MARITAL

Before division of your property can take place, it must first be classified as marital or non-marital. This is an important first step, because marital property is subject to equitable distribution while non-marital property is not. Non-marital property is property either brought into the marriage or given to one spouse alone through gift or inheritance. On the other hand, marital property is property accumulated during the marriage. Sometimes marital property and non-marital property are mixed and used together. In such cases, the non-marital property can actually change into marital property. If a court is unsure in these cases whether the property is marital or non-marital, it will typically presume it is marital.

STEP 2: VALUE MARITAL ASSETS

After classifying the property, the next step is to value each item. Valuation can be done in several different ways. For example, sometimes it can be as simple as looking at account statements or even doing a quick Google search. Other times, however, it may be more complicated and involve hiring appraisers or other experts in the field of valuation. During this step, we use a fair market value—not a liquidation value. The fair market value means the price a willing buyer would pay to a willing seller if both were adequately informed about the transaction.

STEP 3: EQUITABLY DIVIDE MARITAL ASSETS

When the assets are given a monetary value, the court can then decide how to distribute those assets. A common misconception is the court will divide marital property right down the middle, fifty percent to one spouse and fifty percent to the other. This is not the case, though. In Mississippi, the court attempts to divide the property fairly. Because the assets are not simply divided in half, the process involves many more considerations. The factors courts consider in deciding how to fairly divide property include: (1) substantial contribution to property accumulation; (2) spousal use or disposition of assets and distribution by agreement; (3) market and emotional value of assets; (4) value of each spouse’s separate estate; (5) tax consequences and legal consequences to third parties; (6) the extent to which property division can eliminate the need for alimony; (7) the needs of each spouse; (8) other factors which should be considered in equity. These factors are commonly referred to as the Ferguson Factors.

Another common misconception is a stay at home spouse may receive little to none of the marital assets simply because the breadwinning spouse technically paid for the property. Homemakers can breathe a little easier, though, because this is not the case under Mississippi law. Under Mississippi law, the spouse who works and the spouse who takes care of the home are considered to have equally contributed to the accumulation of property. This means no one spouse is necessarily given more weight in the factor that considers the contribution to the accumulation of marital property.

STEP 4: CONSIDER ALIMONY

The final step in distribution of property is awarding alimony. Alimony and property division go hand-in-hand, because alimony is really just another tool used by the court to fairly divide property. This means it is determined on a case-by-case basis and there is no preset method for determining an alimony award. The court will look to how it can use an alimony award to make property division fair. For example, if one spouse is given a heftier cash asset award or a high value asset during property division or has a substantially higher income than the other spouse, the court is more likely to award alimony to the other spouse.

Alimony comes in several different shapes and sizes, but the most common characteristics include: amount, duration, modifiability, whether it survives death and/or remarriage, and the tax consequences.

Permanent alimony is becoming much rarer because forcing a person to indefinitely pay another person also forces the two people into ongoing contact, and therefore, potential for ongoing conflict. Permanent alimony may be modified.

Lump sum alimony is not taxable to the recipient or deductible for the person paying. It is a fixed amount that is not modifiable and is payable regardless of death or remarriage. The most common use of lump sum alimony is a tool to create equity. For example, in cases where a business is not liquid, the court may award a lump sum payment to the spouse not given the business for the sake of fairness.

Rehabilitative alimony is a fairly new type of alimony used to help provide stability for a spouse while he or she is preparing to re-enter the workforce. Rehabilitative alimony technically may be modified; however, most awards of rehabilitative alimony typically last only a few years.

Reimbursement alimony is awarded to a spouse whose contribution to the marriage is too complicated to recognize in the earlier property division process. For example, a spouse who supported the other through school may be awarded reimbursement alimony. Reimbursement alimony is non-modifiable.

Hybrid alimony is probably the most common type of alimony in Mississippi today, because it allows the type of alimony granted to be uniquely-fitted to the circumstances of the particular case. It is a mixture of the other type of characteristics of alimony, used to accomplish certain goals.

Whether the court decides to award alimony and the specific type of alimony awarded depends largely on your case specifically. The good thing about alimony is that it is flexible and can be molded into exactly the type to fit your case. We know property division can be a headache, but being fully informed on the current law and your options makes the entire process smoother. Not to mention, knowing the general process may help you rest easier knowing few surprises will jump out at you in the middle of the process. We are here to arm you with all the essential knowledge you need to assess your situation, see potential outcomes, and move forward with confidence.

Ways to Help Yourself

One of the ways you can help yourself streamline the divorce process is to begin gathering documents which are commonly requested. The easiest way to do this is to obtain a USB storage device and save electronic copies of the following documents. While this list is not comprehensive, it will help you get a good head start on the information exchanges which usually take place during the process of divorce. We recommend you continue to gather new information as it becomes available to you.

  • Copies of your last several paycheck stubs;
  • Copies of your last three annual state and federal income tax returns in full form as filed, including those which were prepared for any business in which you have an ownership interest;
  • The last six monthly account statements for all of your personal and business banking, investment, retirement and/or credit card accounts;
  • A copy of your most recent Social Security Statement;
  • Any financial statement you have prepared for any reason in the last three years;
  • Copies of all insurance policies that are maintained by your or for your benefit;
  • Deeds and debt instruments for all real estate owned by your personally or through any business interest you may have; and
  • Any other document which you believe will help us understand your situation better.

How Can You Help Me?

Here is the way this works, if you would like to talk about a contested divorce, call our office (601-898-8655) or confidentially submit a basic intake form so our staff can complete a standard conflict check. That’s when we make sure nothing on this end will stand in the way of us being helpful. Then, we will schedule a time for you to talk to one or more of our attorneys to go over your situation.

FAQs

How is a business valued in Mississippi in a divorce?

In Mississippi, the value of a business or practice in a divorce is straightforward. According to the Mississippi Supreme Court, the value must be determined on a “fair market value” basis and the only approved valuation methodology is the Net Asset Approach, which calculates the value of the assets and liabilities with no entity or personal goodwill, but with appropriate discounts related to marketability and control. The valuation date is set by the Court. All of this appears simple. However, it can quickly become complex if a spouse owned a business or practice prior to the marriage, inherited a business, or acquired or sold a part or all of a business during the marriage. These events might lead to issues such as value appreciation, commingling of assets, or transmutation that must be carefully analyzed. (Special thanks to Jim Koerber, CVA)

How long does it take to get a divorce in Mississippi?

In short, it depends. However, the absolute shortest amount of time that two individuals can get a divorce in Mississippi is sixty (60) days from the date that the Complaint for Divorce is filed. Realistically, irreconcilable differences cases take several months to complete, while a divorce on fault grounds can take up to and over a year. The length of time that the proceedings take are influenced by many outside factors that your lawyer will not be able to control, such as your spouse, your spouse’s lawyer, and the Judge’s schedule.

How much does a divorce cost?

As with so many other questions regarding divorce, it depends. The cost of a divorce proceeding can vary from relatively inexpensive to extremely expensive, depending on the complexity of the issues involved in the case. In order to even estimate such an expense, it is necessary to have a consultation with a professional so that they can evaluate all of the circumstances involved in your situation.

How will the value of our property be determined?

Sometimes valuing property is very simple and can include merely looking to financial statements. Sometimes, however, it is more complicated and we must hire professionals to value the property. How property is valued is largely determined by the specific circumstances, but it is always valued at a fair market value—which means the price a willing buyer would pay the seller given the buyer knows all the details and circumstances surrounding the property.

If I get a divorce, do I have to go to trial?

No, in Mississippi it is not necessary to have a trial to obtain a divorce. In fact, the majority of Mississippi divorces are negotiated and settled outside of court. However, in order to obtain a divorce without a trial, the parties must agree to a divorce on the grounds of irreconcilable differences, which is our legal term for “no fault.”

If my spouse is at fault for the divorce, do I get to keep everything?

Not necessarily. Fault is not specifically considered by the court, but each parties’ contribution to the stability and harmony of the home is a Ferguson factor. In addition, if it is determined one spouse committed adultery, the cheating spouse should only receive ongoing support if they would be destitute without it.

What are my rights during the period of time between separation and the entry of a court order?

Until the entry of a court order, your rights following separation are the same as they were while you and your spouse were living together. This means you and your spouse enjoy the same equal rights to your home, personal property, and children as you did before. This is often the most chaotic period of the divorce process, so communication with your spouse, if possible, can be crucial. We like to call this the “storm before the calm.”

What are the Ferguson Factors?

The Ferguson factors are the considerations derived from a leading Mississippi case that courts now use to determine how to fairly divide property. They are: (1) substantial contribution to property accumulation; (2) spousal use or disposition of assets and distribution by agreement; (3) market and emotional value of assets; (4) value of each spouse’s separate estate; (5) tax consequences and legal consequences to third parties; (6) the extent to which property division can eliminate the need for alimony; (7) the needs of each spouse; (8) other factors which should be considered in equity.

What is lump sum alimony?

Lump sum alimony is usually a one-time payment used to compensate one party who may not have benefitted as much as the other party during the process of equitable division of property.

What is permanent alimony?

Permanent alimony is what most people think of as the traditional type of alimony—monthly payments awarded to take the place of the support given during marriage. It terminates at the death of either party or when the recipient remarries. It can also be modified based on changed circumstances.

Resources related to Fault-Based Divorce

How Much Will this Cost?
Financial Statement
Property Distribution Factors
Common Documents to Collect
Ferguson v. Ferguson
Hemsley v. Hemsley
Armstrong v. Armstrong
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