When it comes to divorce in Pennsylvania, the state follows the principle of equitable distribution, meaning that marital property is divided between the two parties according to what is considered fair or equitable. This means that assets and income acquired during marriage are presumed to be marital property, such as a home, business, retirement accounts, investments, furniture, artwork, and motor vehicles. Title (the name under which the property is owned) does not necessarily determine the designation of a property as marital or separate. When deciding what is “equitable” or “just”, the court must consider a list of factors set forth in Pennsylvania law.
This list includes the relative income or earning capacity of the parties, each party's contribution to marital property, each party's separate assets, and custody of any child. Marital misconduct such as adultery is not a factor considered by the court in equitable distribution. The first step to equitable distribution is to identify marital assets and non-marital assets. Marital property is generally property acquired during marriage while non-marital property is property acquired before marriage, after the date of separation, or through gift or bequest.
Non-marital property is not subject to equitable distribution. To determine whether an asset is marital or non-marital, several factors must be considered such as when the asset was acquired and how it was acquired. Some assets may have both marital and extramarital components. The second step is to value those assets.
Assets are normally valued as of the date of equitable distribution but under certain circumstances they must be valued as of a different date. For example, non-marital property usually has to be valued from the date of marriage and separation since the increase in the value of a non-marital asset during marriage is marital property. The value of assets can be determined in several ways such as through a professional real estate appraiser for real estate or through account statements for bank accounts, brokerage accounts and retirement accounts without pensions. The dissipation of marital property must also be considered when valuing marital assets.
Dissipation occurs when one party spends money from a marital account after the separation or when one of the parties that has control of a marital asset does not maintain it. The goal is for the overall distribution of marital assets to reflect the percentage distribution. Some assets may be divided between the parties while some may be distributed in their entirety to one party or the other. In order to ensure that assets are divided equitably between spouses, it's best for them to negotiate their own agreement during this phase of the divorce process with the help of their Lackawanna County divorce attorney.
The attorneys at Cooley & Handy have extensive experience representing clients in divorce, support, child custody, and family law matters.