When couples decide to get divorced, one of the most important decisions that must be made is how to divide up their marital property. This process can be difficult and emotional, which is why it's important to understand the rules for equitable distribution of marital property. Equitable distribution of marital property is the legal process used to divide assets and debts acquired during marriage, such as cars, homes, bank accounts, and investments. It's essential to understand the rules of equitable distribution, as it can have a lasting effect on both parties in a divorce.
In this article, we'll explain the basics of equitable distribution of marital property and provide insight into how it works. Equitable distribution is a legal principle that allows a court to divide marital property between two spouses fairly. The goal of equitable distribution is to make sure that each spouse gets his or her fair share of the assets and debts acquired during the marriage. The court may consider several factors when deciding how to divide the property equitably, such as:
- The length of the marriage
- The age and health of each spouse
- The income of each spouse
- Any prenuptial agreements
- Whether one spouse contributed more financially to the marriage
- Whether one spouse contributed more to the care and upbringing of the children
- Whether one spouse was at fault for causing the marriage to end (e.g., by committing adultery)
It's important to note that equitable distribution is not necessarily equal division. For example, if one spouse has significantly more assets than the other, the court may award a larger portion of those assets to the other spouse in order to achieve an equitable outcome. Similarly, if one spouse has significantly more debt than the other, the court may award a larger portion of that debt to the other spouse in order to achieve an equitable outcome. In some states, courts use a “commingling” rule when determining how to divide marital property. This rule states that any asset or debt acquired during the marriage (regardless of whose name it’s in) is considered marital property and should be divided equitably between both spouses.
In other states, courts use a “separate property” rule, which states that only assets or debts acquired by either spouse individually during the marriage are considered marital property and should be divided equitably between both spouses. It's important to note that equitable distribution only applies to marital property – not separate property. Separate property includes any asset or debt acquired before the marriage, as well as any gifts or inheritances received during the marriage. These assets and debts are not subject to equitable distribution and will remain with the spouse who owns them.
When Does Equitable Distribution Apply?
Equitable distribution applies in any divorce where there are assets or debts that need to be divided between two spouses. This includes both contested divorces (where one spouse disagrees with the other's demands) and uncontested divorces (where both spouses agree on how to divide their assets and debts).In a contested divorce, the court will make a decision about how to divide the assets and debts based on a variety of factors, such as each spouse's contributions to the marriage, the length of the marriage, and the current financial situation of each spouse.In an uncontested divorce, the spouses must come to an agreement about how to divide their assets and debts, and the court will then order the division accordingly. No matter what type of divorce it is, equitable distribution is based on the idea that both spouses should receive a fair share of the marital property. The court must consider all relevant factors in order to ensure that the division of assets and debts is fair for both spouses.
How Does Equitable Distribution Work?
In most cases, couples can reach an agreement on how to divide their marital property without going to court. This agreement can be done through mediation or negotiation with an attorney. If an agreement cannot be reached, then a court will decide how to divide the marital property according to state laws on equitable distribution.Generally, equitable distribution seeks to divide marital property in a fair and just manner based on the contributions of each spouse, the length of the marriage, and other factors. Each state has its own laws that govern equitable distribution, so it is important for divorcing couples to understand their state's laws. When dividing marital property, courts may consider both the economic and non-economic contributions of each spouse. Economic contributions include any assets and debts acquired during the marriage, such as a house, car, bank accounts, retirement accounts, and credit card debt. Non-economic contributions include activities such as raising children or managing the household.
In addition, courts may take into account the earning potential of each spouse, future financial needs, and any other factors that could influence the division of property. In some states, such as California, the court must first determine which assets are considered “marital property” and which are considered “separate property.” Separate property is any asset or debt that was acquired before marriage or through inheritance or gift. These assets are not subject to equitable distribution and remain the sole property of the spouse who acquired them. The court will then divide the remaining marital property in an equitable manner. In order to ensure that both spouses receive a fair share of marital assets, courts may order a variety of remedies, including awarding one spouse a larger portion of the marital estate or ordering one spouse to pay spousal support. In some cases, a court may order one spouse to pay the other spouse for his or her non-economic contributions.
It is important for divorcing couples to understand their state's laws on equitable distribution in order to ensure that the division of marital property is fair and just. Equitable distribution is a complex process that requires a court to assess the value of all marital property and then fairly divide it between two spouses. It is important to understand how equitable distribution works so you can make sure you receive your fair share of the assets and debts you have acquired during your marriage. If you need assistance navigating the process or have any questions about equitable distribution, it is recommended that you contact an experienced family law attorney. By understanding equitable distribution of marital property, you can ensure that you are receiving your fair share of the assets and debts during a divorce.
