Equitable distribution is a method of dividing property when a couple divorces. Courts in most states apply equitable distribution rules when a couple is not able to create a marital settlement agreement on their own through out-of-court negotiations.

Courts consider many factors when deciding how to divide up property under equitable distribution rules. These factors may include the contributions each spouse made to the other person’s career and to acquiring marital property; the assets, income, and earning potential of each spouse, and the living standard enjoyed during the marriage.

When equitable distribution rules apply, this doesn’t necessarily mean marital property (and marital debt) is divided equally. It means the goal is to create a fair division of assets based on the factors relevant to the situation.

Here are some common factors considered in equitable distribution:

  1. Duration of the Marriage: The length of the marriage is often a crucial factor. Longer marriages may lead to a more equal distribution of assets.
  2. Contributions to the Marriage: Contributions of each spouse to the marriage, both financial and non-financial, are considered. This includes contributions as a homemaker, caregiver, or support for the other spouse’s career.
  3. Income and Earning Capacity: The financial situation of each spouse, including their income, future earning capacity, and financial needs, is taken into account.
  4. Standard of Living: The court may consider the standard of living established during the marriage and try to maintain it for both spouses after the divorce.
  5. Age and Health of the Parties: The age and health of each spouse can influence the court’s decision, especially if one spouse has specific needs or limitations.
  6. Custodial Arrangements: If there are children involved, the custody arrangement may impact the distribution of assets. The custodial parent may be awarded the marital home, for example.
  7. Debts and Liabilities: The court will also consider the debts and liabilities of the parties when determining the distribution of assets.
  8. Tax Consequences: The tax implications of the asset distribution may be taken into account. Procedure for assets distribution
  9. Initiating the Divorce Proceedings:
    • One spouse typically files a divorce petition, and the other party responds.
    • Some jurisdictions require grounds for divorce, while others allow for “no-fault” divorces.
  10. Temporary Orders:
    • In some cases, the court may issue temporary orders to address immediate concerns such as spousal support, child custody, and financial responsibilities during the divorce process.
  11. Discovery Process:
    • Both spouses, through their attorneys, engage in the discovery process to gather information about each other’s financial situation, assets, debts, and other relevant information.
    • This may involve the exchange of financial documents, interrogatories (written questions), and depositions.
  12. Valuation of Assets:
    • Assets acquired during the marriage, including real estate, investments, retirement accounts, and personal property, are identified and valued.
  13. Categorizing Property:
    • Assets are categorized as marital or separate property. Marital property is subject to division, while separate property may remain with the individual who owns it.
  14. Negotiation and Settlement:
    • The spouses, along with their attorneys, may negotiate a settlement regarding the division of assets. This could involve direct negotiations, mediation, or collaborative divorce processes.
    • The goal is to reach a mutually agreeable distribution of assets without the need for a trial.
  15. Court Proceedings:
    • If the spouses cannot reach a settlement through negotiation, the case may proceed to court.
    • Each party presents evidence supporting their position on asset distribution.
  16. Equitable Distribution:
    • The court applies the principle of equitable distribution, considering factors such as the duration of the marriage, financial contributions, and future needs of each party.
    • The court may order a distribution of assets that it deems fair, though not necessarily equal.
  17. Finalizing the Divorce Decree:
    • Once the court determines the division of assets, a final divorce decree is issued.
    • The decree outlines the terms of the divorce, including the distribution of property and any other relevant agreements reached.
  18. Implementation of the Decree:
    • The spouses must follow the terms outlined in the divorce decree, which may include transferring property titles, closing joint accounts, and other actions to implement the asset distribution.

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