Equitable Distribution of Assets - Massachusetts

The Commonwealth of Pennsylvania uses the process of "equitable distribution" to distribute the marital property, including debts, during a divorce. Generally, all assets and liabilities (debt) acquired during the marriage, no matter whose name they are in, make up the marital estate. There are some exceptions to this general rule.

An important note: equitable distribution does not necessarily mean "equal" distribution. Rather, equitable means a distribution that is fair in light of the circumstances. The court first determines which property makes up the marital estate, and then applies a statutory set of factors to determine what an equitable distribution of the assets and debts would be. The court will give a written report to the parties of its findings.

PA Equitable Distribution Factors

The factors are listed in Pennsylvania Statutes Title 23, Section 3502. They assist the court in making a determination of how to equitably divide marital property. They include:

• The length of the marriage.
• Any prior marriage of either spouse.
• The age, health, station, amount and sources of income, vocational skills, employability, estate, liabilities and needs of each spouse.
• The contribution by one spouse to the education, training or increased earning power of the other. For example, if Spouse A worked to send Spouse B to medical school and Spouse B's earning potential greatly increased, that may be considered in Spouse A's favor.
• The opportunity of each spouse for future acquisitions of capital assets and income.
• The sources of income of both spouses, including retirement, insurance, pension and other benefits.
• The contribution or dissipation of each spouse in the acquisition, preservation, depreciation or appreciation of marital property. This includes contributions of a homemaker.
• The value of the separate (non-marital) property.
• The standard of living established during the marriage.
• The economic circumstances of each spouse at the time the division is to be effective, including:
  • Tax ramifications, and
  • The expenses accrued selling, transferring or liquidating any particular asset.
• Whether either party will serve as a custodian to any children after the marriage.

Pennsylvania is not a community property state. A community property state, such as California, the spouses are joint owners of all marital property and the court's job is often to find a way to split everything 50/50. Equitable distribution is not equal distribution — the court must determine what split is equitable (60/40; 55/45, etc).

What is Marital Property in Pennsylvania?

According to Pennsylvania property division laws, property in a divorce is classified as either marital property or nonmarital property.

Marital property includes all of the property that each spouse acquired during the marriage or acquired using funds earned during the marriage. Additionally, marital property includes increases in the value of nonmarital property up to the date of the couple’s separation.

Nonmarital property, also called separate property, includes assets acquired by either spouse prior to marriage, assets acquired through a gift or inheritance at any time (excluding gifts from one spouse to another during the marriage), and assets acquired by either spouse after the date of separation.

Each spouse needs to make a list identifying all of the assets that they own together and which they own separately. It’s essential to correctly categorize each type of property as marital or nonmarital in a divorce. Only assets that are considered marital property are subject to equitable division. This means that spouses, in most cases, get to keep their separate property.

Property may include:

• Cash
• Personal property
• Vehicles
• Real estate
• Retirement accounts
• Family business
• Bank accounts
• Trusts
• Stock options
• Life insurance
• Debt

Who Keeps the Marital Residence in a Divorce in PA?

Once marital separate property and marital property are identified, the process of equitable distribution can begin. One of the most common questions people have is "who gets to keep the house?" The answer is either party could keep the family home after divorce in PA.

The value of the property will need to be determined. Generally, the court will use the asset’s current value or the market value of the asset, which essentially is the monetary value that the property would be sold to another party. To determine this, the court might look at recent sales of comparable assets or you can hire an appraiser to determine less common property.

If you are considering divorce in Chester County and want to learn more about equitable distribution, contact the Law Office of Wesley W. Legg, Esquire today at (484) 401-7079 or via our online contact form to set up a consultation. Wesley W. Legg represents clients living in Chester, Delaware, and Montgomery Counties.