One
of the issues that comes up in all most every divorce and in many separations
is how to divide property that parties acquired during their
relationship. Unfortunately, if this relationship was not a marriage, it
can be very difficult to figure out how to distribute jointly titled vehicles,
homes, and other assets and it may involve numerous separate actions to address
these items.
If
the parties who are uncoupling were married, the Divorce Code sets forth well-established
rules and guidelines for how to divide those assets that they acquired during
the marriage through a process that we call “equitable distribution.”
Many clients I meet with are surprised to learn that, in Pennsylvania, assets
are not divided equally. While they may be, it is not an edict that
everything is distributed 50/50. The court engages in an analysis of
numerous different factors to determine what division would be equitable under
the circumstances and tries to “effectuate economic justice between the
parties.”
What
does that mean?
I
recently came across a very good quote out of Miller v. Miller, 783 A.2d
832 (Pa. Super 2001) which describes it as follows:
“The methods by which divorcing parties
effectuate economic justice are familiar and well settled. The process of
equitable distribution is an exercise in martialing, valuing and dividing the
marital pot in a fair manner. Not every piece of property can or should
be split in half. Sometimes one spouse is entitled to more property than
is the other. In some instances, the sale of property must occur so that
each spouse can receive his/her rightful amount. In other instances, a
spouse may be allocated a specific item of property and the other spouse will
receive cash or credit for his/her share in that same item.
In all of these scenarios, whether the property
division is done by an agreement of the parties or a Court Order, the goal is
the same: to take the assets of the marriage and divide them in such a way as
to effectuate economic justice between the parties.”
So,
what have we learned from the above quote?
Frankly,
we learn a lot from this little quote. First off, there are a lot of ways
to “skin the cat.” Not only will no two people’s cases play out exactly
the same (so just because it happened in your buddy’s divorce doesn’t mean it
is going to happen in yours), but it may also be that no two assets in the
marital estate are divided the same.
The
courts do not go through the list of marital assets and divide every single one
50/50.
One asset
may be offset against another, i.e. “you are keeping the house, so I am keeping
the checking account.”
Or
some assets may warrant being skewed more in favor of one party than the
other. So, your overall division of the marital estate might be 50/50 but
somebody might get 70% of the fair market value of the property that they
inherited two years before separation but retitled in joint names (see my prior
post with regards to the “Transmutation of Assets”). Since the other side
didn’t really do anything to generate this asset, this skew in favor of the
inheriting party may seem more “just” to the Court.
As
stated in the above Miller quote, a
big part of the equitable distribution process is to identify the assets and
liabilities that are in the marital estate and determine their values. If you don’t know all of the assets or their
values, you may need to engage in discovery, which is a topic I am sure I will
get around to discussing at some point.
Thereafter, the Court would move forward with dividing these assets in a
manner that seeks to effectuate economic justice.
It
is also important to note that it is well within the authority of the Court to
order you to sell off your belongings. While they are generally not
looking to have you fire sale every item you have acquired in the course of
your marriage, it may be necessary for a piece of the marital estate to be sold. Simply because one party may desire to
retain an asset, if it is not economically feasible, it may be ordered to be
sold by the Court, even over your objection.
All
of the above issues will depend upon the Court’s analysis of what we call the
“equitable distribution factors” set forth in the Divorce Code. There are twelve
different factors that the Court can take a look at to decide the fairest way
to divide assets between the parties. They may look at the length of
marriage, the incomes of the parties, one party’s contributions to the marital
estate as a homemaker, what separate assets either party might have beyond the
marital estate, etc.
The
Court’s analysis of these factors as applied to the specific facts of each
individual case dictate how the Court fashions its award for equitable
distribution, which, as stated, may be an equal 50/50 division, but may
not. Again, like with all matters that fall into the Family Court, the
determinations that are rendered are usually very fact specific and the change
of one of the characteristics about a party or their marriage may have a significant
impact on how the marital estate is most equitably divided.
Again,
if you are contemplating divorce, for more particular guidance with regards to
how your marital estate may be divided, you should consult with an attorney who
can review the history of your marriage and the assets that comprise the
marital estate to provide you with more specific advice unique to your
situation.
If
you found this article to be helpful, I ask that you please share it and “like”
my page. As always, if anyone has any questions or suggestions for follow
up topics, please comment below.
www.uncouplingpittsburgh.com
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