Assigning automobiles can be a complicated issue during a divorce. As Lowell Family Law Attorney Bruce Gage contends, leased automobiles can be an especially contentious issue.
Asset or Liability
Its common for there to be arguments over whether a leased vehicle is an asset or liability. In essence, it is both. It is an asset because the lessee has access to the vehicle, but it is a liability based on the fact that payments are contractually obligated. A Lowell family lawyer can help you understand these logistics.
True Leases versus Lease Purchases
When the car is contracted as a true lease, the vehicle goes back to the lessor. A lease purchase is different in that the lessee becomes the new vehicle owner when the lease is up. This fact can be determined based on the final payment required to get the title.
For example, a final payment of $1.00 or $10.00 often indicates a lease purchase. On the other hand, if the end payment is $5,000, it is less likely that a purchase was the agreement’s intent.
It is helpful to work with a Lowell family law attorney to help you decide how to treat your leased vehicle during your divorce proceedings.
If it is determined that the car was a true lease, it will be excluded from the marital estate. This is based on the fact that there is a liability associated with the asset value.
If the car is a lease purchase, it will be treated in the same way as a normal vehicle purchase that is made using a down payment and subsequent payments. The vehicle is valued and the liability is calculated based on the remaining payments and the buyout provision.
When you’re struggling through a divorce and are not sure how divide your assets, call a Lowell family law attorney at the Law Office of Bruce A. Gage at 978-654-6005 or toll-free at 877-829-0831.