One of the most important legal issues that family courts deal with during divorces is how to divide the spouse’s property. Each state has laws governing how to divide marital property, either the community property method or the equitable distribution method.
Equitable distribution is more common, with over half of the states dividing marital property according to this scheme.
As previously noted, every jurisdiction in the U.S. uses one of two property distribution schemes during divorce proceedings. The goal of these schemes is to divide all of the spouses’ marital property, including:
Any property that was acquitted as a devise, gift, or bequest is considered the separate property of that specific spouse. The community property method is the less common method of property distribution.
The community property method divides all marital property 50/50 between spouses. In contrast, the states that use the equitable property method divide the property as fairly as possible.
It is important to note that this does not necessarily mean the property will be split evenly. This method aims to consider the facts of each case and the needs of each party to the divorce so the division can be as far as possible.
These are numerous factors courts will consider when dividing property.
The role of courts in equitable distribution cases is to perform four basic functions related to the property of the parties, including:
These may be much more challenging than they appear at first glance. It is essential to identify the property with identification, settling property division or going through an equitable distribution trial.
A court must identify whether the property is separate or marital, what the property is, and who has it. The next step is classification.
Classification means labeling property as:
These classifications are applied at the date of separation. Separate property is known and non-divisible property.
Separate property may be taken into account when ordering or negotiating a division. However, it cannot be divided because it is not marital property.
Property can have both aspects that are both marital and separate. For example, one spouse may own a home, but the spouses may have upgraded together.
Once property is classified, it must be evaluated. Evaluation applies as of the date of separation.
If either party requests it, a court must consider a decrease or increase in value as of the trial date. The parties and the court must use the net value after liens and not the gross value of the property.
In some cases, evaluation may be an issue. This occurs when the property is a collectible, such as:
It may also include private business interests. In these cases, an appraiser should be employed to evaluate the item independently.
Finally, the property must be divided. A court may order an unequal division based on certain factors, such as:
The physical health or mental health of one of the parties;
One factor that cannot be used as grounds for an unequal division of marital property is marital fault, which may include adultery or domestic violence. Courts can consider one spouse’s efforts to neglect, waste, or devalue marital property after the couple has separated.
In some cases, the court will use a distributive award, or a lump sum paid at interest over no more than six years, to equalize the parties’ shares of the marital property.
When a court is considering dividing marital property during divorce proceedings, it is aware that each case is different. Therefore, the goal of equitable distribution division is to consider the case’s specific circumstances and divide the marital property as fairly as possible.
Ultimately, this may mean that one spouse receives more marital property than another. Factors that a court will consider when dividing property include:
This is not an exhaustive list of all of the factors the court will consider during the property division phase of divorce proceedings. An individual should consult with an attorney in their jurisdiction for a more complete list.
No, a court cannot force a spouse to sell separate property for division or to give a portion to the other spouse otherwise. A court can take the amount of separate property that each spouse has into consideration when dividing the marital property.
For example, if one of the spouses has a significant amount of separate property, such as real estate or vehicles, and the other spouse does not have any, the court may award the spouse with nothing but a larger share of the marital community property in the divorce.
No, equitable distribution is not the only way to divide marital property. Whether an individual resides in an equitable distribution or a community property state, they have the right to draft their own agreement with their spouse to divide their marital property as they wish.
So long as the agreement is written and signed by all the parties and is fairly negotiated, a court will likely honor the divorcing couple’s wishes. These two schemes are the default that courts use to divide property when the couple cannot agree.
Any marital property agreement has to be approved by the court. However, as previously noted, unless there are facts indicating duress or any other unfair pressure against one party, the court will likely honor the agreement.
Although any type of legal proceeding may be confusing, a divorce often adds some extra emotional stress, making the situation seem overwhelming. If you are currently involved in a divorce or are planning on filing for divorce, it is important to consult a family lawyer in your area who has experience handling divorces and marital property issues.
Your lawyer can explain your rights and advise you of the various factors that may affect the outcome of your case. Your lawyer can also represent you if you negotiate an agreement with your spouse and help ensure your rights are protected.
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