Maintaining joint ownership of marital property after divorce.
If left to a Judge, no property acquired by the parties during their marriage will be maintained as joint property after the divorce. Our courts are required by the Domestic Relations Statute to equitably (fairly) apportion all marital property. If a judge is involved, no property will remain jointly owned after the divorce. But this does not mean that it must be this way.
Sometimes people will have a successful business or a valuable piece of real property that they want to continue to own and manage. This can be accomplished only by mutual agreement. For example, I recently represented a woman married to a successful local artist. She had always been the "business manager" of his art studio and, quite frankly, her management was one of the main reasons her husband was successful. The parties maintained the art studio as jointly owned in their Marital Settlement Agreement.
More commonly people may want to maintain joint ownership of real property. I have a case currently where the parties are agreement that Mom and the kids will stay in the home through high school graduation. This will provide their children with a little more stability during those critical early teen years. Once the kids are out of high school, the terms of our agreement require the property to be sold.
The key difference to maintaining joint ownership of former marital property is survivorship. A spouse will inherit from a deceased spouse, but a business partner will not. In a business relationship, a deceased partner's interest will pass according to the terms of a Will or by means of intestate succession if there is no Will.
It is important to understand, however, that maintaining joint ownership of property, with nothing more, may cause problems with management of that joint property after the divorce. This is why in all cases where divorcing people maintain joint ownership of formerly marital property they should create a business operation agreement. An operating agreement will precisely lay out the duties and responsibilities of the parties with regard to the joint asset. Debt payments, maintenance, income, etc. are all issues that are resolved by way of a business operating agreement.
It is important that any Operating Agreement entered into by the parties to manage jointly own/formerly marital property, be attached to, and made a part of, the Marital Settlement Agreement and Divorce Decree. This will allow any problems with enforcement of the Operating Agreement to be addressed by the Family Court, rather than the Court of Common Pleas. The Family Court will address the issues faster and has the ability, as a court of equity, to dispose of the property eliminating future problems between the. parties.