The division of assets and property is common during a divorce. Having an equal split is not always possible as there may be tangible assets that can not be split down the middle. Deciding between equal and equitable distribution is something that lawyers and the court system have to navigate. There are many types of property and other factors that will determine if you need equal or equitable distribution. Understanding the difference between the two will help limit conflict during legal proceedings while also ensuring each party feels they received something out of the divorce.
The Definition Of Equal And Equitable
Equal distribution of property refers to splitting all the assets down the middle. Regardless of either partner’s financial situation, contributions, or specific circumstances, this method will provide each party with 50% of what they owned together in marriage. Equal distribution is most common in community property states which require a 50/50 split for all divorces.
Equitable distribution of property means that the division is “fair” based on multiple factors. Each party’s needs, earning potential, health, custody, location, and environmental situation will be considered when dividing property owned during marriage. The goal of an equitable distribution is to have a fair outcome that both parties benefit from, but it won’t necessarily be 50/50 in monetary value. One spouse could receive more in the divorce depending on the circumstances.
The court and legal counsel will be the ones to determine what is fair. They will present the evidence and describe to each spouse why these assets were given to them and not the other.
Dividing Different Types Of Property
Married couples can accumulate many different assets and property during their marriage. There are also many assets that are not connected to the marriage that may or may not be subject to equal or equitable distribution. Here are some different types of property that could be split during your divorce proceedings.
Real Property
Land and anything that is permanently attached to it counts as real property. Property that was purchased during the marriage will be considered for division, even if only one member’s name is on the deed. Typically during a divorce, the property will be sold and the money is then divided between the parties. One partner may give the other the money they would have received if the property had sold to claim the property for themselves. Refinancing a home or transferring the deed may need to be done in the division of real property.
Personal Property
Generally, this is a property that can be moved from place to place. Cars, jewelry, collector’s items, furniture, tools, dishes, firearms, watercraft, etc. When the personal property has a legal title and it was purchased during the marriage, it will be considered for division. The general rule for dividing personal assets is to have each person build a separate home, if there are two of something, each party will receive one.
Non-Marital Property
Property that was owned before the spouses got married or was received by gift or inheritance will not be considered marital property. Each person in the marriage will get to keep what is theirs that was not labeled marital property. Unless the property has been combined with something that is marital property, it will be given to the original owner. If it was something that was used as marital property, it could be subject to equitable distribution.
Retirement Plan Or Other Benefits
Payments made to a retirement plan, pension plan, or life insurance policy will typically be regarded as marital property. These assets will be divided equitably meaning that one partner may receive the direct benefits, while the other could receive something of equal value (equity of the home or cash from a property). If there is nothing to give the spouse without the retirement benefits, the court may have to divide it.
Influencing Factors
There are certain considerations that a court will always take into account when determining whether you need equal or equitable distribution. One influencing factor that was previously mentioned is gifts or inheritance. Inheritances and gifts that were given to a person or a married couple can often be divided equally, so there will be a clearer line of division.
Courts will also look at the length of the marriage and your future earning potential when dividing assets and property. If they assume that one spouse’s earning potential is higher, the lower-earning spouse could receive more monetary compensation that is more equitable rather than equal.
Other factors that can influence the distribution of property include:
- Health conditions
- Age and lifespan
- Financial contributions to the marriage
- Custodial parenting responsibilities
- Contributes to career bettering or education during the marriage
- Financial standing or debt risk of either partner.
Divorce Help From KNK Law
Many marriages that end in divorce will come with complexities that you could have never foreseen. Divorce can be messy, long, emotional, and financially overwhelming. Our team at KNK wants to help you settle your matters as quickly and efficiently as possible. KNK Law specializes in many areas, but most on divorce and property distribution because we know that an experienced attorney is crucial during divorce proceedings. Helping our clients get what they deserve is our top priority. Reach out to our divorce lawyers to schedule a consultation and see how we can help you.