What's Fair Is Fair: Dealing With Marital Assets In an Equitable Distribution State

Posted on: 4 February 2022


The states handle divorce using two overall methods: equitable distribution and community property. Nearly all states use the equitable distribution way of distributing property and debts and a few use community property standards. Read on to find out more about the most-used method, equitable distribution, and how it deals with marital property.

Understanding Marital Property

Not everything a couple owns is necessarily marital property. This can be confusing, at first, for divorcing couples who tend to have their own ideas about their assets. A marital asset is anything that came into the couple's possession during the marriage. Anything brought with the parties into the marriage is an exception. Other exceptions are anything inherited during the marriage, and anything won or gifted to only one party during the marriage.

For example, if one party already owned a home before the marriage, that home is probably considered separate and not marital property. However, if the owner added their spouse's name to the deed, it has now been intermingled and is marital property. The intermingling of assets after marriage can make things extremely confusing for many couples. In some cases, a forensic accountant must be brought onboard to untangle assets.

Almost anything from pets to bank accounts and more can be considered a marital asset. When it comes to settling the property during divorce, however, separate property can play a part. Even if both parties and the judge agree that a certain asset is a separate property, it can be a factor when dividing up property. For example, if one party seems to have more than their fair share of marital and separate property, equitable distribution of property could mean separate property can stand in for marital property, giving one spouse slightly more than their share of marital property.

Understanding Equitable Distribution

Fairness is the goal of equitable distribution. Unfortunately, that means divorcing parties might be uncertain of what assets they will retain prior to the divorce. In general, however, the equitable distribution laws prompt these questions:

  1. Who bought the asset? Unless it was a gift, the buyer may retain it.
  2. Whose money was used to buy the asset? With commingled property, the source of funding can matter.
  3. Who used the asset the most? A vehicle used primarily by one party may be appropriately awarded to that party.
  4. Who cared for the asset the most? With a pet, for example, the person who took care of it on a day-to-day basis might retain ownership of it.

It's advisable to make a list of all property and provide it to a divorce lawyer, such as Thompson Salinas Londergan, LLP. They can help you decide what is likely to remain your property and what might be subject to equitable distribution rules.