Like many people, you may think that a divorce results in an automatic 50/50 split of marital property. However, a court's determination of an equitable distribution doesn't necessarily mean everything is split equally at 50/50. Every case is unique and determined based upon its own specific facts and circumstances.
Divorce is a common part of life in American society, as confirmed by the Pew Research Center. Their analysis of marriages that end in divorce shows that 40% end within the first ten years of marriage. Over three-quarters (78%) of these marriages end before marking a silver anniversary.
One of the biggest issues divorcing couples face is the distribution of marital assets and wealth. This decision is not as simple as identifying all properties acquired by either spouse during the marriage and splitting everything in half.
Family courts consider each spouse's contribution toward the acquisition to ensure equitable distribution.
Is There a Difference Between Equitable and Equal Distribution?
An equal distribution of assets requires that they be divided equally (or as close to equally as possible). In contrast, an equitable distribution provides a fair legal property distribution of marital assets. It considers the specific facts and circumstances of each couple's situation.
Is an Equal Division Better Than an Equitable Distribution?
An equal marital assets division will likely result in both spouses taking similar amounts of property away from their marriage. In most situations, equitable distribution will provide a more reasonable solution.
What "Equitable" Really Means
In an effort to distribute property fairly, courts consider many different factors. These factors include each spouse's contribution and their individual needs. This generally leads to an unequal but fair property division.
How Courts Interpret Fairness
Because fairness is subjective, no two divorces can be decided using the same magic formula. Judges will consider case-specific factors, including financial contributions, caregiver responsibilities, and future earning capacity, to determine a fair distribution of property.
The Most Common Misconceptions Regarding 50-50 Divisions
There is an awful lot of misinformation about how property divisions work equitably. Many people assume that since they are splitting everything, it will automatically be 50/50. Unfortunately, nothing could be further from the truth.
Some common misconceptions regarding 50/50 splits include:
- All marital assets must be split down the middle
- Income levels don't matter when deciding how to split your property
- You get credit for everything you did during the marriage (like taking care of the children)
- Every single divorce will end with similar outcomes
Understanding the above-stated misconceptions will enable you to have more realistic expectations. It helps you understand how judges view each case.
What Does Equal Division Look Like in Practice?
There may be instances that warrant an equal distribution of marital assets. This is typically when both spouses have comparable incomes and comparable financial contributions to the marriage.
An example would be two attorneys with similar salaries. Let's say each contributes to household expenses and child-rearing responsibilities. In those types of cases, it may be deemed "fair" for the marital assets to be divided equally (50/50).
The Process of Dividing Assets: What Really Happens
When courts consider an "equitable" or "fair" split of marital assets, they will typically weigh many issues. The court will refer to these issues as factors in determining distribution of marital property. They help guide judges' decisions on whether each party has received an equal share of the marital assets.
Commonly Used Factors for The Decision-Making Process
In determining how to distribute marital assets, courts may utilize several factors. Some of those factors include (but are not limited to):
- Each spouse's income or earning capacity
- Each spouse's contribution to the marriage (including but not limited to caregiving)
- The length of the marriage
- Each spouse's projected financial needs or responsibilities
There may be some variation in terms of which of these factors a court considers most relevant. By considering these factors, the courts can ensure that both spouses receive an equal share of the marital assets. In particular, these are assets that were accumulated throughout their relationship.
How Cases Differ From One Another
Due to differing circumstances, no two cases have ever been resolved in the same way. Because of this, the application of equitable distribution varies greatly from one case to another.
It is very beneficial to know this difference. It's because it allows those going through the property settlement to enter with realistic expectations.
Frequently Asked Questions
Can My Separate Property Turn Into Marital Property?
Any property that you acquired before the marriage is yours. However, if you "commingle" your premarital property by mixing it with property that belongs to both of you, it might be considered a part of shared marital property. Maintaining clear records will help avoid disputes.
Will Debts Also Be Split During a Divorce?
Yes. Joint debts will be shared. However, individual debt may be assigned to the spouse who incurred it, especially if it did not benefit the household.
Who Keeps the House When We Get a Divorce?
If the house is in one spouse's name, they generally get to keep the property. If the property is jointly owned, then the courts consider who can buy out the other spouse and maintain the property. Parental roles don't automatically mean you get to keep the house.
Do Retirement Accounts Count Toward How Much Money Each Of Us Has?
Yes, especially retirement plans acquired during the marriage. Each spouse's contribution to the retirement plan matters here.
Does Infidelity Affect The Process?
No. In most states, the financial circumstances of the parties involved matter the most. While adultery might be a factor in determining child custody issues, it is rarely taken into account.
Can Either Of Us Change Our Agreement After We Agree Upon It?
It is highly unlikely. Any changes would likely require evidence of fraud or other serious issues.
Equitable Distribution Provides Clarity for Divorce Proceedings
Equitable distribution does not require equal division of marital property. A court reviews actual factual evidence and applies its discretion to determine what constitutes fairness. Understanding this concept will give you better insight into property distribution in a divorce.
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