Property Distribution Upon Divorce

In both separate and community-property states, courts are directed by statute to provide for an equitable distribution of property. This means that the court is instructed by statute to divide all of the marital property in a fair and just manner. Equitable does not necessarily mean equal. The courts are instructed by statute what factors to take into consideration when dividing marital property.

In essence, whether you live in a separate or community property state, all property acquired during your marriage will usually be equitably distributed upon divorce. The reason that property is distributed along these lines is that in most states, each person in a marriage is considered to have equally contributed to the marriage as though it were a partnership and is therefore entitled to half of the assets and also responsible for half of the liabilities.  A large part of a lawyer’s job is to figure out the worth of a marital estate.

As stated above, just because each person is considered to own an equal interest in the marital property under both separate and community property states does not mean that the property will be equally distributed. Although every state has its own laws, the general method for determining what is an equitable distribution of the marital property is to apply the following types of factors:

• The duration of the marriage
• Prenuptial agreements of the parties
• The age, health and employability of each spouse
• The lifestyle enjoyed by the parties during marriage
• All sources of income of each spouse
• The opportunity for future acquisition of assets by each party
• The economic circumstances of each spouse at the time that the property distribution is to become effective.

Based upon these factors, courts must consider all of the marital assets and divide the assets in what it determines to be a fair and equitable way. Oftentimes, a non-working spouse is awarded a greater percentage of the assets because the court determines that the working spouse is better equipped to acquire assets in the future than the non-working spouse.

In addition, the courts look to the lifestyle enjoyed by the parties during marriage and distribute the property in a way that best allows the parties to maintain their standard of living. In many cases, this means that the lower wage-earning spouse receives a larger portion of the marital assets in order to make up for the parties’ unequal earning capacity.

It should be noted that “fault” is not to be considered in property distribution, except in situations in which one party is responsible for wasting assets. An example of wasting assets is when one spouse has lost assets due to gambling or has spent money irresponsibly. In those unusual cases, the court may decide to award a greater portion of the marital property to the spouse who did not participate in the gambling or other irresponsible spending habits.