Protecting Your Assets
hen a marriage ends, an important part of the process is dividing the marital property between the parties. In Pennsylvania, this process is called “Equitable Distribution.” A lot of people mistakenly believe that the marital property is divided 50/50 upon divorce. In fact, the property is actually divided in a manner that is equitable, or fair. It is certainly possible to divide the property in half, but such a division is not required and is certainly not the default scenario.
Marital Settlement Agreements
Equitable Distribution can be accomplished in two different ways. One way is for the parties to negotiate and reach an agreement as to who receives what in the divorce. The parties can then memorialize their agreement in a document called a Marital Settlement Agreement, or MSA. The MSA is a contract that outlines how the parties have agreed to divide the marital assets and debt, as well as how to handle other issues related to the divorce such as alimony, child support, and custody of the children. This means that the parties can agree to divide the property 50/50, or in any other way they wish. Once an agreement is reached and and the MSA is signed by the parties, it can then be incorporated into the divorce decree and becomes a formal court order. This means that the MSA can be enforced by the court.
It is important to remember that once an agreement is reached on Equitable Distribution and the divorce is settled, the agreement cannot be modified later. Only the provisions on child custody and child support are subject to modification. Marital Settlement Agreements are a great option in cases where the divorce is uncontested and the parties can deal with one another amicably. Many divorcing couples choose to handle their property division through an MSA because it is not always predictable how the judge might divide the property and the process is generally faster and saves money in legal fees.
Litigating Equitable Distribution
Like other aspects of divorce, Equitable Distribution sometimes requires going to court. If the parties are not able to reach an agreement on Equitable Distribution, the court will have to divide the property through formal proceedings. The first step in this process is to determine what property is considered marital property. Marital property is all real or personal property acquired by either party during the marriage, regardless of whose name it is in. Unfortunately, marital property also includes marital debts. Generally each party will be required to file what is called an Inventory. An Inventory lists what each party believes to be a marital asset and what items should be considered marital debt. Items that are believed to be non-marital property would not be subject to Equitable Distribution.
The next step is to determine the value of each item of marital property. In some cases, the parties can agree how to value each item. In other cases, it may be necessary to hire an expert to determine the value. After figuring out what needs to be divided and the value of the items subject to Equitable Distribution, the court will determine how to fairly divide the property.
The touchstone for the court’s decision making process will be what is equitable under the circumstances of each individual case. To help determine what is equitable, Pennsylvania courts look to a variety of factors outlined in the Divorce Code. The statute lists 11 factors for the court’s consideration, but the major ones include the length of the marriage, sources of income for both parties, standard of living of the parties during the marriage, and the age, health, and employment skills of each party. Equitable distribution must be resolved prior to the divorce being finalized, and all rights to marital property end once the final divorce decree is entered.
Our attorneys have years of experience with all aspects of divorce, including Equitable Distribution. We work one-on-one with our clients to reach the best outcome based on their circumstances and goals. We strive to keep the emotional and financial burden of divorce low by attempting to reach a negotiated settlement, if that is your goal. On the other hand, we are not afraid to aggressively litigate the case if the circumstances require it. Contact Us Now to discuss your case!