What is Equitable Distribution?
Family courts in most states divide marital property according to what's fair, or equitable, for both parties during a divorce. This isn't the same as equal distribution, however, as the goal of equitable distribution is to consider the needs of each party and the facts of the case. The equitable distribution of property is determined on a case-by-case basis, subject to negotiation between the two parties and the discretion of the judge.
If you're getting divorced in a common law property state (where equitable distribution is recognized), you'll want to understand how property division will be determined.
Community Property vs. Equitable Distribution: The Basics
In the nine community property states, which include California and Texas, marital property (generally, all property acquired during the marriage) is divided fairly equally. This is done regardless of who contributed more to the marriage, who has more separate (or individual) property, or whether one of the spouses is largely to blame for the divorce.
Generally, anything purchased with money earned by either spouse during the marriage is considered community property and subject to a roughly 50/50 split in a divorce (although separate property may be established through a written contract, such as a postnuptial agreement).
In common law property states, courts take a much more delicate approach to property division. Instead of automatically dividing marital property down the middle, these states take a step back and consider what would be the most fair to both parties. This includes consideration of separate property as well as marital property, the needs and means of each party, and factors suggesting fault (such as an affair or domestic abuse).
For example, if one spouse gave up their career in order to stay home and raise children and therefore would have a difficult time earning a living after the divorce, the court may award that party a larger cut of the marital property. Conversely, if one spouse was abusive or otherwise at fault for the failure of the marriage (even in a "no-fault" divorce), the court may award them a smaller percentage of the marital property.
Determining What's Equitable: Factors Considered
In states that recognize equitable distribution of marital property, spouses have an opportunity to reach an agreement on their own (subject to approval) before the courts intervene. This may take place in a collaborative environment or through each party's attorney. If the parties are unable to reach an agreement, the courts will use their discretion (within the parameters of state marital property law) in order to reach a resolution.
When courts are tasked with determining equitable distribution, they'll generally consider the following factors:
- Duration of the marriage;
- Which spouse has primary custody of minor children;
- The financial needs and liabilities of each spouse, present and future (for instance, one party may need to invest in a college degree in order to earn a decent wage);
- The financial well-being and earning potential of each spouse, present and future;
- Amount contributed by each spouse to the combined marital property;
- Non-monetary contributions to the family (such as child-rearing, unpaid work on the home, etc.);
- Age, health, and special needs of each spouse;
- Child and/or spousal support obligations of either spouse for previous relationships;
- Total value of each spouse's separate property (again, this isn't subject to division, but does factor into the overall determination); and
- Adverse actions by each spouse (such as gambling debts, extramarital affairs, or instances of domestic violence).
Is Your Marriage Subject to Equitable Distribution of Property? Talk to an Attorney
Divorce is a complicated, emotionally charged process for most. It can sometimes be difficult to maintain a cool head and make the right decisions for you and your family, which is why legal counsel is strongly encouraged. If you're getting divorced in a state that recognizes equitable distribution of property, your best option is to work with a local divorce attorney.