Equitable Distribution Factors

In equitable distribution states, courts are asked to split property among divorcing couples based on the principle of fairness; in deciding on how to appropriately divide property, courts tend to look at the same factors, although they are not obliged to give particular weight to any of them.

Some factors considered by courts when applying equitable distribution principles include the following:

• Premarital Agreements: If the parties have a valid, written premarital agreement, or prenuptial agreement, which is a contract made between the parties before they are married, this will likely determine property division upon divorce. One of the main functions of a premarital agreement is to lay out plans for property distribution in the event of a divorce, and parties waive their rights to have a court decide what is fair.
• Age and/or Health: Generally if one spouse is significantly older and/or ill, and especially if s/he is unable to work, a court will likely award more to that spouse. That said, if both spouses have decreased capacities to work, a more equitable award is likely.
• Earning Power: Courts generally award the larger share of property to the spouse with the lower earning power or less wealth; the theory behind this is that the spouse with higher earning power or wealth can recoup after divorce much more easily than the other party.
• Homemakers: Staying home to take care of the house and/or raise children is this work in and of itself, and it also enables the other spouse to work outside the home. Someone who has been a homemaker for many years may also face a tougher time getting into the job market after divorce. Accordingly, if a homemaker can show that s/he has foregone certain employment or training opportunities in favor of staying home, a court may choose to compensate for this in a property division.
• Length of Marriage: The longer a couple is married, the more likely it is for a court to view the relationship as an equal partnership and try to reflect such parity in a property distribution award. This becomes especially important in situations in which one partner has significantly more wealth and/or earning power.
• Nonmarital Property: If one spouse has significantly more nonmarital property than the other, that could be a basis for giving more marital property to the less wealthy spouse. As noted, courts are not obliged to give equal amounts of property to each spouse, but if the parties have sufficient assets to leave each party in a comfortable situation after the divorce, courts usually will try to do so.
• Property Earner: This comes into play especially where a family business is concerned; courts generally award business assets to the party most responsible for earning and keeping up with them.
• Tax Consequences: Courts will consider immediate, specific tax consequences such as the imposition of capital gains tax on a property to be sold; the party that will suffer the tax consequences may be awarded more to compensate. Alternately, a tax benefit can be offset in favor of the other party.
• Waste or Dissipation of Assets: Also known as economic fault, the waste or dissipation of assets by one party can count against him or her in property distribution upon divorce. Examples include extreme gambling losses or financially keeping a mistress.

Notably, most states do not consider fault when determining applying equitable property distribution principles. In a legal sense, fault refers to things like adultery or spousal abuse. Courts generally prefer to look at solid economic realities rather than explore the types of he said/she said discussions that could occur if non-economic fault were considered, and so they often avoid the subjects entirely.