Equitable Distribution in PA
In Pennsylvania, when a couple is divorcing, the legal term for dividing marital assets and marital debts is equitable distribution. Pennsylvania is known as an equitable distribution state and not a community property state. Our courts divide marital property and debts based on the principles of equity. That means it is at the court’s discretion to divide marital assets and marital debts as it sees fair. Equitable distribution does not always mean that property and debts will be equally divided. The goal is to achieve an equitable, or fair, distribution of property.
Fault or marital misconduct is not taken into consideration during equitable distribution. Pennsylvania courts may use some of the following in determining equitable distribution:
- Length of marriage
- Previous marriages
- Age of both parties
- Health of both parties
- Income of both parties
- Tax implications
- Amount of non-marital assets
- Prenuptial agreements
- Who will have custody of children when applicable
- Did either person help the advancement of the other’s income
- Standard of living during the marriage
- Employability of both parties
Marital Property or Marital Assets in PA
If a settlement cannot be reached prior to entering the court system, the court will divide the marital assets in a way it deems fair given the particular circumstances of the cases. Marital assets are also referred to as marital property. Marital assets can include a home, cars, furniture, businesses owned by the parties, jewelry, art, investments and retirement accounts. Anything purchased during the period of time considered as “the marriage” will be deemed marital property, even if it was purchased or put in only one party’s name. For example, even if your name does not appear on the title to a vehicle purchased by your spouse during your marriage you may be entitled to half of that vehicle.
Non-Marital Assets or Separate Property in PA
In Pennsylvania, the law allows separate or non-marital assets to be omitted from the equitable distribution process. Any property that was excluded by a prenuptial agreement will not be included in the equitable distribution. Any property brought into the marriage and kept separate during the marriage is also considered non-marital property. Gifts received by just one spouse during the marriage may also be kept separate. Inheritances received before or during the marriage that are kept separate may also be excluded. However, if the value of any of the non-marital property increases during the marriage, the increase in value may be considered marital property. If a spouse chooses to use non-marital funds for a common purchase, like buying a home, that money will often be considered marital property.
Marital Debts in Pennsylvania
In Pennsylvania, marital debts are defined as debts that were acquired by either spouse after the marriage date and before the date of separation. Common marital debts include credit card bills, mortgages, car loans, home equity loans, tax obligations and judgments. Even if a credit card was only in one spouse’s name, if the credit card was used during the marriage, both parties are responsible.
Pensions and 401(k) Plans
If you acquired any part of your pension, 401(k) plan, stock plan, stock options, deferred compensation and other retirement incentives during the marriage, that portion is marital property and must be shared with your spouse when you divorce. You may be able to trade other assets or come to an agreement if you want to keep your pension or retirement intact. Petrelli Previtera has a unique network of the most highly qualified specialists available to provide you with the finest input, to include:
- Certified Public Accountants (CPA’s) familiar with all divorce law and up-to-date caselaw affecting the financial situation you may be in.
- Pension, 401(k), and Retirement Evaluators
- Child and Adult Psychiatrist, Psychologist and Therapists
- Certified Divorce Financial Planners
- Marital Personal Property Evaluators
- Real Estate Appraisers and Realtors
- Business Evaluators if you or your husband own a business which requires valuation as part of the marital estate
- Bankruptcy Counseling with Consulting Bankruptcy Attorneys
Petrelli Previtera has helped their clients locate hidden assets and income that a spouse may possess in an attempt to wrongly and fraudulently keep a marital asset for themselves. Occasionally, someone will try to hide assets in order to pay less or receive more support. Petrelli Previtera offers each client an individual solution for remedies sought such as:
- Requesting the court impose a lien as security for the payment of alimony or any other award for the other party;
- Awarding the right to live in the marital property to one party to the exclusion of the other;
- Requesting the court to direct one party to continue to pay health insurance or life insurance on behalf of the other party; and/or
- Requesting special relief, including injunctions or orders necessary to prevent the removal, dissipation, transferring or encumbering of real or personal property
The Pennsylvania Divorce Code controls your divorce if you do not agree on the division of property and debts on your own. If you have a prenuptial agreement that does not include something that is available to you according to Pennsylvania Law, you may still be able to assert those rights.
Questions Frequently Asked
What is equitable distribution of marital property under PA law?
What about Individual Property?
- Property owned by one spouse before the legal marriage began
- Gifts or inheritances received by one spouse before or during the marriage
- Property attained by one spouse (in their name only) during the marriage and not used by the other spouse or for the benefit of the marriage
- Property/debts designated as separate in a legally enforceable contract, such as a prenuptial or postnuptial agreement
- Personal injury awards, excluding any compensation for lost wages
- Any property obtained by one party using their separate property assets (such as inheritance funds) with the explicit intention of keeping the acquired property as separate
Even though these are labeled as separate property, you do have the option to use them in negotiations with your soon to be ex-spouse to keep other property that you may wish to keep. For example, perhaps you want to keep the vacation home, but you are willing to give your spouse the boat you bought with an inheritance from your grandmother that you received right after you were married.
What Are Factors in Determining Equitable Distribution?
- The financial state and earning power of each party
- The value of each spouse’s separate property, including a spouse’s business, business interests, retirement plans, 401(k) plans, stocks, and bonds
- The degree to which each spouse contributed to the procurement of marital property
- The degree to which each spouse contributed to the education and earning power of the other spouse
- Future financial needs and liabilities of each spouse
- The ages and overall health of each spouse
- The liquidity of their marital property
- If there are any premarital and prenuptial agreements
- Spousal maintenance or alimony obligations
Contact Our Lawyers for Assistance
If you are considering a divorce or have questions about division of property, it is critical to speak with an experienced family law attorney who will walk you through the divorce and equitable distribution process and make sure all assets and debts are covered. Contact Petrelli Previtera, LLC to schedule a consultation to discuss your rights.