Vehicles, including cars, motorcycles, trailers, and boats, are assets that are potentially subject to equitable distribution in a divorce. Their values, and the debts against them, are taken into consideration when equitably dividing all the other property and debts of the marriage. However, vehicles need special consideration. Often times their value goes beyond their blue-book value as they are used to transport your children, get your pets to the veterinarian, get you to work or are used directly in your work.
You do not have to necessarily refinance or sell your vehicle when you divorce, but you need to understand that a vehicle is different than dividing your other assets like bank accounts, home furnishings, or 401(k)’s. Owning a vehicle subjects you to something called vicarious liability. This means that even if one spouse keeps and operates a vehicle, the other spouse, if their name remains on the title, is potentially liable for any damages arising out of an accident, not just the spouse who is driving at the time of the accident. Addressing this issue correctly in a divorce is often more important than who is paying the loan, as the potential liability is much higher. Even if you choose not to transfer a title in your agreement or judgment, you need to be made aware of this potential.
