EQUITABLE Distribution
Upon dissolution of a marriage (divorce or annulment) the court must distribute the “marital property” between the parties and declare that the parties’ “separate property” remains with the party who owns it.
The law and cases describe and continue to described “marital” and “separate” property and, oftentimes, the designation of either becomes blurred and unclear without brain-twisting analysis.
Basically, “marital property” is any property either party earned or obtained during the course of the marriage, as long as the same is not “separate property”. “Separate property” is property that a party comes to the marriage with and does not turn it into marital property, or, a gift, recovery from a lawsuit or property that is inherited by a party.
Separate property can easily be turned into marital property by the owner of the separate property transferring ownership of the separate property into the name of the other party, or, in the case of certain property, such as a marital residence, the active participation of the non-titled spouse causes the increased value to the separate property and, in that event, the non-titled spouse may be entitled to a portion of the appreciation of value caused by that active participation. Every case is determined on a case-by-case basis and there is no formula for determining if a separate asset has been converted, even partially, into marital property.
Property is distributed in am “equitable” fashion, not necessarily “equal” or 50/50. However, if one reads the various case law, it is easy to see that the longer the term of the marriage, that has produced children, the more likely the courts will make a 50/50 equitable distribution.
From the statutory law, the court must consider the following factors in making an “equitable distribution” of the “marital property”:
- the income and property of each party at the time of marriage, and at the time of the commencement of the action;
- the duration of the marriage and the age and health of both parties;
- the need of a custodial parent to occupy or own the marital residence and to use or own its household effects;
- the loss of inheritance and pension rights upon dissolution of the marriage as of the date of dissolution;
- the loss of health insurance benefits upon dissolution of the marriage;
- any award of maintenance under subdivision six of this part;
- any equitable claim to, interest in, or direct or indirect contribution made to the acquisition of such marital property by the party not having title, including joint efforts or expenditures and contributions and services as a spouse, parent, wage earner and homemaker, and to the career or career potential of the other party;
- the liquid or non-liquid character of all marital property;
- the probable future financial circumstances of each party;
- the impossibility or difficulty of evaluating any component asset or any interest in a business, corporation or profession, and the economic desirability of retaining such asset or interest intact and free from any claim or interference by the other party;
- the tax consequences to each party;
- the wasteful dissipation of assets by either spouse;
- any transfer or encumbrance made in contemplation of a matrimonial action without fair consideration;
- any other factor which the court shall expressly find to be just and proper.
Many of the foregoing factors can not be considered unless there is extensive financial discovery, that is, each party’s financial life is an open book. Financial discovery is required very liberal; a party who does not cooperate in the discovery process can be punished by the court, by awarding the other party attorney fees, financial sanctions, the striking of his/her pleadings or dismissal of the divorce action is he/she is the person who brought the divorce action in the first place.
