Divorce is a complex and emotional journey that involves sorting through numerous aspects of a shared life, including the division of property. In Hawaii, property division during a divorce is governed by specific laws designed to ensure a fair distribution between spouses. This blog post will explain the types of property that can be divided in a divorce and outline the general framework for property division in Hawaii.

Types of Property Divisible in a Divorce

In a divorce case in Hawaii, several types of property are subject to division between the spouses:

1. Financial Institution Accounts: This includes all types of deposit accounts and brokerage accounts where couples might have saved or invested their money.
2. Retirement Benefits: These encompass a wide range of retirement accounts, including benefits from the Federal Government, State of Hawaii, private employers, and Individual Retirement Accounts (IRAs).
3. Real Property: This refers to real estate holdings, which can range from family homes to investment properties.
4. Closely Held Businesses: Ownership stakes in professional practices and locally owned businesses are often complex but crucial parts of property division.
5. Interests in Larger Businesses: This could include shares in bigger enterprises such as shopping centers or other significant commercial investments.

Legal Framework for Dividing Property

Hawaii follows a unique approach in determining how property is divided during a divorce, distinguishing between marital separate property and marital partnership property.

Marital Separate Property

Marital separate property is not subject to division but is considered when evaluating the post-divorce financial situation of each spouse. Properties that fall into this category include:

• Properties covered by a premarital or marital agreement.
• Properties acquired after the marriage by gift or inheritance.
• Properties that have been maintained separately with non-marital funds and have never been co-mingled.

For instance, if a piece of real estate is acquired after marriage through inheritance and the mortgage payments were made using rental income (not marital income), it remains the sole property of the inheriting spouse.

Marital Partnership Property

This includes all property acquired during the marriage that does not qualify as separate property. Here’s how marital partnership property is generally divided:

• Category 1: Premarital property equity determined as of the date of marriage, awarded entirely to the owner spouse.
• Category 2: Appreciation or increase in equity of premarital property from the date of marriage to the time of divorce, divided equally between both spouses.
• Category 3: Equity of property acquired after the date of marriage by gift or inheritance, awarded entirely to the owner spouse.
• Category 4: Appreciation or increase in equity of gifted or inherited property from the date of acquisition to the time of divorce, divided equally between both spouses.
• Category 5: Equity of all other property at the time of divorce, generally divided equally unless compelling reasons dictate otherwise.

Debts

Debts that are not secured by property (like personal loans and credit card debts) are generally assigned to the spouse in whose name they are titled or who benefitted from them.

Navigating property division in Hawaii requires a clear understanding of what constitutes marital separate property versus marital partnership property. This framework ensures that the division process is conducted fairly, respecting both the contributions and rights of each spouse. For those undergoing a divorce, consulting with a legal expert who understands the nuances of Hawaii’s property division laws is crucial to achieving a fair and equitable outcome.