Equitable Distribution: Who Gets What in a Pennsylvania Divorce
By Megan Carpenter
Divorce cannot just be emotionally taxing, it can also be financially taxing. There are many components to a divorce; in this article we will be focusing on one important facet: equitable distribution. First, Pennsylvania is an equitable distribution state. This means that the court is given the power, during a divorce or an annulment, to distribute the property and assets of a marriage as they see fit. Some states are a community property state, which means that all property, earnings, and debts acquired throughout the marriage are evenly divided between spouses (50/50).
In an equitable distribution state, the court considers many factors when dividing marital assets, properties, and debts. The court can lump all assets together or it may divide individual assets independently. The court will consider up to 11 factors when making these decisions. Some aspects of the 11 factors are detailed below:
● Length of marriage
● Prior marriages
● Age, health, workforce skills, amount and source of income
● Contributions made to the education or earning potential of either party
● Opportunity for each party to make income or gain assets in the future
● Sources of income, including retirement funds or other benefits
● The contributions (or lack thereof) of each party to the marital home (including homemaking duties)
● Value of property of each party
● Standard of living established by both parties during the marriage
● The economic circumstances each party will be left in after the division of property, including tax ramifications and any costs incurred through selling or distributing property or assets.
● Whether a party will be serving as a custodian for any dependents
The court also reserves the right to determine which party is going to live in the marital home. The court can determine that both parties can live there throughout the process. If one of the parties does not cooperate with what the court has ordered, the court reserves the right to enter a judgment or seize property on behalf of the cooperating party.
In Pennsylvania, there are two types of property to be considered in a divorce: marital property and separate property. Marital property is income and assets acquired over the course of the marriage. Some examples of marital property may include: a home, a car (even if the title is in one spouse’s name), investments, art, retirement funds (401k), etc. Next is separate property, which is income and assets that were acquired prior to the marriage, inheritance left to one spouse, property acquired after separation, and property and/or assets protected by a prenuptial agreement. However, the increased value in separate property gained through the marriage may be considered marital property. For example, a home owned prior to marriage which value has increased over the duration of the marriage; the increased value in money may be considered a marital asset, even if the property itself is not.
Marital debts are also important to consider. Marital debts include any debt acquired from the date of marriage to the date of final separation. This can include debts like mortgages, loans, credit cards, car payments, etc. Individual debts are usually considered marital property. As in, if your spouse racks up a large credit card balance through the course of your marriage, you will be responsible as well. A court will also divide these marital debts as they see fit.
Divorce can be difficult and require you to produce more documents than you could imagine, especially during a possibly emotional time. Keeping organized and taking the time to gather all appropriate documents will help your attorney to put together a strong case in your favor.