Equitable Distribution of Marital Property
When a marriage ends, the parties often reach a financial agreement without going to trial. However, when they cannot agree, the matter may be settled by the courts. Equitable distribution of marital property refers to the legal division of mutually owned debts and assets. There is not a specific formula for determining each party’s share. The court will consider many factors, and make a judgment based on what is considered equitable (fair). Because the settlement is largely left to the judge’s discretion, it is important to choose a knowledgeable, skilled lawyer on your side.
Separate vs. Marital Property
Some assets are not considered part of the marital property. Assets considered separate property include:
- Property that was acquired and fully paid for prior to the marriage
- Gifts or inheritances received by one party during the marriage
- Anything that was specifically excluded according to the terms of a legal prenuptial or postnuptial agreement
- Property that either party acquired after the separation
Separate property is fully owned by one spouse, and not generally considered in the division of marital property. However, a few exceptions exist, such as increases in property value during marriage and non-marital funds that were contributed to marital property. Financial traces may be required to settle some property disputes.
Dividing Marital Property and Debts
Marital property generally includes any property acquired during the marriage, even if it was purchased in one party’s name. The value of certain assets, such as a retirement account begun prior to marriage, may be divided with one portion treated as separate property and the rest treated as marital property. Similarly, debts acquired during the marriage are considered mutual, even if one spouse was responsible. This includes debts such as a credit card bill for personal clothing.
The goal of the courts is to divide assets and debts fairly, which does not necessarily mean evenly. The factors considered in this judgment include, but are not limited to:
- Duration of the marriage
- Previous marriages by either spouse
- Amount of separate property owned by each party
- The income, health, and age of each spouse
- Contributions either party made to the other party’s earning potential
- Potential tax consequences associated with the judgment
- Standard of living during the period of marriage
- Custody arrangements of children, if applicable
Usually, the best scenario is to settle out of court; however, due to the complexities of the law it is advisable to consult with an experienced attorney before committing to any agreement. Jack A. Rounick can help you protect your assets, and ensure that you fully understand anything you agree to. His impressive list of credentials includes Fellowship with the International American Academy of Matrimonial Lawyers and the American Academy of Matrimonial Lawyers, and countless satisfied clients. Don’t make a mistake you will live to regret. Call 484-684-6055 and schedule a consultation today.