Equitable Distribution And What It Means To Your Divorce
The US, as far as divorce goes, is divided into two different legal categories: equitable distribution and community property. Almost every state follows the equitable distribution legal method when it comes to dealing with marital property and debts. If you live in an equitable distribution state, knowing what to expect is important, so read on to find out more.
It's Not Necessarily An Equal Distribution
With the moniker of equitable distribution, you might think things are meant to be split equally, but that is not always the way things go. It's not about being equal but it is about being fair. That means several factors are examined to determine which party has to pay those credit card bills and which one is awarded the vacation home. Take a look at how each individual marriage situation can affect distribution:
- Whether or not a spouse is awarded spousal support (alimony). For example, the judge might decide that spousal support for one spouse means more property for the other spouse.
- How long the couple was married. Longer marriages can mean the judge looks less at what the couple brought to the marriage and more at what the present situation holds.
- The way liquid and non-liquid assets affect distribution. Cash is more liquid than real estate or stocks and bonds.
- How the divorce will affect each spouse financially. For example, a spouse that is about to lose their health insurance coverage is at a distinct disadvantage.
What Is Not Part of the Equation
Only marital property and debt are considered, and that covers only things bought or acquired or debts taken on after the date of the marriage. With equitable distribution, debts acquired by only one party, such as a credit card, are more likely to remain the responsibility of the cardholder. Any property gifted to one party, inherited by one party, or awarded remains that party's property. Another issue with property settlements is when marital property from each spouse gets mixed up. For example, one party enters the marriage with a savings account, and both spouses contribute to that account after the date of the marriage. This is known as intermingling and requires some untangling during the divorce.
Anything you and your spouse can work out negates the need for the judge to decide. To find out more about how divorce will affect your property and debts in an equitable distribution state, speak to your divorce lawyer.