Kentucky is an “equitable distribution” state. This means that the court may consider a variety of factors in determining how marital property and/or debts are dividing and/or apportioned between divorcing spouses. However, particularly in long-term marriages, property and debts are frequently divided equally.

Kentucky courts generally follow a three step process in adjudicating property issues in contested divorce matters. A trial court's first step must be to categorize each piece of contested property as either marital or nonmarital. Next, the court must assign each party's nonmarital property to that party. Finally, the court must equitably divide the parties' marital property in just proportions. See generally, Smith v. Smith 235 S.W.3d 1 (Court of Appeals of Kentucky 2006).

Frequently, people are unsure whether a particular asset is “marital” or separate. In general, property that was acquired during the marriage is considered “marital” and thus subject to division. However, there are exceptions to that general rule. For example, property that was inherited by you alone are generally separate, and thus exempt from distribution.

Typically, property that was acquired by one of the parties prior to the marriage is deemed “separate” and thus exempt from equitable distribution. However, the Kentucky Court of Appeals has held that when premarital property increases in value because of the joint efforts of the parties, the appreciate may be deemed marital, and thus subject to equitable distribution. Smith v. Smith 235 S.W.3d 1 (Court of Appeals of Kentucky 2006).

Under Kentucky law, the issue of which spouse is at “fault” for the breakdown of the parties’ marriage is generally not a factor that affects the distribution of property.

Because of the complexity, uncertainty and cost of having the court rule on property issues, many divorcing couples attempt to amicably resolve their issues through a marital property settlement agreements. Sample Kentucky property settlement agreements are available for download at divorcetoday.com