Equitable Distribution of Property is essential to both parties in a divorce. Learn more about what it entails below.
Key Aspects of Equitable Distribution:
- Definition: Equitable distribution involves the allocation of both assets and debts accumulated during the course of the marriage between the divorcing spouses. It applies to various types of property, including real estate, financial accounts, investments, personal belongings, and other marital assets.
- Factors Considered: The court takes into account several factors when determining how to divide the marital property equitably. The court must begin with the premise that the distribution should be equal unless there is a justification for an unequal distribution based on all relevant factors. These factors may include the duration of the marriage, the financial contributions of each spouse, the contributions as a homemaker, the earning capacity of each party, and the economic circumstances of both spouses after the divorce.
- Marital vs. Separate Property: In equitable distribution, only marital property is subject to division. Marital property generally includes assets acquired during the marriage, regardless of which spouse owns the property or whose name is on the title. Separate property, on the other hand, usually consists of assets acquired before the marriage or acquired by gift or inheritance to one spouse during the marriage and is not divided.
- Equitable vs. Equal: Equitable distribution does not necessarily mean an equal 50/50 split of the marital property. The court’s goal is to achieve a fair distribution based on the unique circumstances of each case. In some instances, an equal division may be appropriate, while in others, a more lopsided distribution may be deemed fair based on the circumstances.
- Court Discretion: The court has broad discretion in determining how to equitably distribute the property. Judges carefully consider all relevant factors to arrive at a fair and just division that considers the contributions and needs of both spouses.
- Settlement Agreements: In many cases, divorcing spouses may choose to negotiate and agree on the division of their property through a settlement agreement. If the parties reach a fair and reasonable agreement, the court may approve it and make it legally binding.