Equitable Distribution and Divorce
Key Points
  • Do not make the mistake of believing equitable means equal. Equitable is better understood as "what is fair".
  • Not all states are equitable distribution states but those that are have unique laws. The factors that are considered are often the same or similar from one state to another, but one that is often different is the consideration marital fault (or not).
  • Certain equitable distribution states have a method of starting off with everything being divided equally and each spouse must argue as to why it should not be. Equal division is the starting point.

Also called equitable assignment, the word equitable does not mean equal; it means fair. In this regime, assets acquired during a marriage are subject to distribution. This model can result in distributions of property of unequal amounts; for example, the marital home going to the mother who has custody of the minor children of the marriage.

The laws on equitable distribution differ from one state to the other. In dividing property fairly and equitably, judges consider what are termed "factors" that give the court "the freedom to consider anything that is relevant to [an individual] situation." In determining whether a spouse's interest is marital property, a court must decide whether a spouse's interest meets the legal definition of property. Educational degrees and future inheritances are not property, and cannot be divided in a divorce.

Each jurisdiction sets forth mandatory factors a judge must consider. These include:

  • the length of marriage,
  • the age, health, occupation of the parties,
  • station in life and lifestyle of the spouses,
  • liabilities and needs,
  • tangible and intangible contributions of the parties to the marriage,
  • assets and liabilities, sources and amounts of income,
  • behavior of the parties during the marriage and
  • vocational skills and employability.

Some states also permit a judge to consider discretionary factors that include

  • nonmarital property, which may work in favor of the less wealthy spouse;
  • earning power, which may work in favor of the disadvantaged spouse;
  • original earner, which may be a consideration in dividing a family business;
  • services as a homemaker, which recognizes the contributions of stay-at-home moms;
  • waste and dissipation, which may work against the profligate spouse;
  • fault, which is no longer much of a consideration;
  • tax consequences and
  • premarital agreements.

In some jurisdictions, an inheritance - even one acquired before the marriage, kept only in the name of the beneficiary and never used for family purposes - could be subject to equitable distribution. Sometimes a portion of the appreciation in an asset that came to one spouse before the marriage - for example, stock - may be subject to distribution. Usually in this routine, a spouse remains the sole owner of his or her earned income.

Equitable distribution does not limit the claims of a spouse to his or her share of the marital estate even when that spouse owns a great deal of separate property because the theory works on the assumption that the marriage is an economic unit and that what the couple acquired during their marriage is subject to distribution, regardless of need.

Among equitable distribution states, eight states - Arkansas, Florida, Indiana, New Hampshire, North Carolina, Ohio, West Virginia, and Wisconsin - begin with a presumption that assets should be divided equally and then entertain arguments from both spouses about why property should not be divided equally.

Useful Online Tools

Suggested Reading
The Property Division Handbook The Property Division Handbook
This book will explain in detail the property distribution aspect of divorce and separation. It will focus on the rights each spouse has under certain laws, situations, and circumstances, and how the division of the property will be decided by the court or through negotiation.

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SPOUSES CAN DO IT -- The easiest and least expensive way for a couple to divide and distribute the marital estate is for the spouses to do it themselves. Courts approve any settlement that is fair and reasonable. When courts divide property, normally the judge grants each spouse a percentage of the total value.
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