When dividing your property in divorce, most people believe that Equitable Distribution in a divorce means that all assets are distributed 50/50. However, equitable distribution does not necessarily mean equal. There are a number of factors that determine how the assets are split in a divorce.
The other method for dividing up assets is called “Community Property” . We will only discuss the method of Equitable Distribution and not Community Property. Almost all of the states handle the division of property in an Equitable Distribution way. In the majority of cases, marital property is divided on a 50/50 basis, but there are some situations that require the splitting of assets to vary from equal division.
Prior to splitting the assets, the first step to take is to list all the assets and then specify the source of the funds. If the funds are a gift to just one spouse, inheritance or an injury settlement, this would be considered separate property. However, it is important to note that separate property can become marital if funds are comingled with marital funds. When funds are comingled, it sometimes becomes difficult to split out the separate property and therefore becomes marital.
Once the funds have been identified as marital, the next step is to determine how to split these assets. This is usually done by reviewing various factors:
- The financial condition of each spouse, including earning capacity and the value of separate property of one spouse over the other spouse.
- Duration of the marriage and age and health of the parties
- Need of custodial parent to occupy or own the marital residence
- The loss of inheritance and pension rights
- An award of maintenance
- Direct and indirect contributions
- Liquid or non-liquid character of the property
- Future financial circumstances of the parties
- The difficulty of valuing marital assets
- The tax consequences to each party
- The wasteful dissipation of assets
- Transfer in contemplation of action
In Divorce Mediation, we will keep you informed of the law, but also note that as long as you agree, we can vary from the law and do what the two of you both feel is fair.
Contact us for a FREE Consultation to discuss the process of mediation.