What is Equitable Distribution?
In a divorce case, Equitable Distribution is the process of identifying, classifying, valuing, and allocating all of the marital assets and debts. Marital assets may include real property (such as the family home), tangible personal property (such as vehicles, boats, household items, clothing, etc.), and intangible personal property (such as banking and investment accounts, retirement accounts, stocks and stock options, business interests, and intellectual property interests). Marital debts may include secured debts (such as the mortgage on the family home or a vehicle purchase loan) or unsecured debts (such as credit card debts, income tax debts, and student loans).
How are the Assets and Debts Allocated Between the Spouses?
If the spouses are able to agree, they may divide their assets and debts in any manner they see fit. If the spouses cannot agree, the the divorce court will allocate the assets and debts in a manner that the court determines to be equitable. In dividing the assets and debts, the court is required to consider the equitable distribution statutory factors. These statutory factors include, among other things, the facts and circumstances leading to the breakdown of the marriage, the length of the marriage, the mental and physical health of each spouse, and the monetary and non-monetary contributions of each spouse to the acquisition of property and to the well being of the family. In considering these factors, there is no presumption that the property will be divided equally. Instead, the Court will allocate the assets and debts in the manner it deems just and fair based on its analysis of the statutory factors.
Can the Spouses Agree on How to Divide the Property?
The spouses are absolutely entitled to divide the property and debts in any manner and in any proportion they see fit. In fact, we encourage our clients, to the extent he or she is willing, to settle the property division issue. It is much less time consuming and cost-effective to reach an agreement on the division of property and debts instead of leaving it in the judge's hands. And unlike other family law issues (other than spousal support), once an agreement regarding the property and debts is memorialized in writing, the divorce court will have no authority but to enter a divorce order consistent with the agreement.