Equitable Distribution and Divorce
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:
Some states also permit a judge to consider discretionary factors that include
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.
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DATE OF SEPARATION – Depending upon the laws of the state of residence, the Date of Separation – called the DOS – has a profound impact on the eventual division and distribution of property and debt, including credit, pension benefits, and other marital assets. As of the DOS, the separated spouses are now in limbo legally and financially and remain so until the actual Date of Divorce. A great deal of money may be at stake. For example, one spouse may share responsibility for any debts incurred by the other; the value of a retirement plan or other marital asset, such as residential property, may fluctuate, often by thousands of dollars.
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