What is Equitable Distribution?
Unless you live in one of the nine community property states, your state’s laws require an equitable distribution of all marital property and debts between you and your spouse when you divorce. However, an equitable distribution does not necessarily mean that you and he or she must divide up your marital assets 50/50. In fact, equitable is a synonym for fair, and what may be fair for one divorcing couple may be completely unfair for another. Consequently, “equitable distribution” is a flexible term that’s based on your particular situation.
Equitable Distribution Factors
Numerous factors, including the following, go into determining what constitutes a fair and equitable property settlement agreement for you and your spouse:
- Your respective ages and health statuses
- Your respective earnings and earning capacities
- Your respective educational levels
- Whether one of you suffers from an illness or condition that requires higher than normal medical expenses
- Whether one of you has an alcohol, drug or gambling addiction that tends to dissipate assets
- Which of you will have primary custody of your children
- How much noneconomic support each of you contributed to the marriage
- The length of your marriage
Separate Property
Keep in mind that your fair and equitable property settlement applies only to marital assets, not the property owned by either of you separately. In general, the following types of assets are considered separate property and therefore exempt from equitable distribution:
- Property you owned prior to the marriage
- Property you inherited during the marriage
- Property you received as personal gifts during the marriage
- Financial assets you received as the result of a personal injury or another lawsuit you brought in your name only
Marital Property
Marital property, on the other hand, is usually defined as assets you and your spouse accumulated during the course of your marriage. This includes whatever assets you bought, regardless of which of you paid for them, even if those payments were made out of your personal earnings or solely owned bank account.
The same logic applies to your marital debts. If a debt was incurred during the marriage, it likely qualifies as marital debt, even if only one of you undertook and paid the loan or used your solely owned credit card.
Seeking Legal Advice
If you have any questions about what your marital property consists of or what your equitable property settlement agreement should look like, your best course of action is to obtain the advice and counsel of an experienced family lawyer who can give you the necessary legal guidance you need.