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Equitable Distribution in Pittsburgh

Divide Marital Property Fairly with a Pittsburgh Divorce Attorney!

Divorcing spouses must somehow divide their property. Many divorcing spouses (with the help of counsel) are able to divide their property and debt by agreement, outside of court. But if the parties cannot agree, then the parties' marital property is divided by the court through equitable distribution. If you are considering a divorce, you should be aware of the mechanisms of equitable distribution. Dividing property and debts can cause considerable tension and strain upon divorcing parties, especially those involving a high net-worth divorce.

What is equitable distribution?

In a Pennsylvania divorce, equitable distribution is the process used by the court to divide the marital property. The court uses a 3-step process in determining equitable distribution:

  1. It identifies the marital property.
  2. It values the marital property.
  3. It divides and distributes the marital property.

What is marital property?

Generally speaking, marital property consists of the assets, property, and debts acquired between the date of marriage and date of separation. This includes the increase in value of pre-marital property. So, a pre-marital house (without any debts) worth 100K at the date of marriage and 225K at the time of distribution has a marital value of 125K. So the determination of whether property is marital (or how much is marital) often depends on when it was acquired. If property was acquired during the marriage, it is usually marital property - even if it is the name of only one spouse. However, there are several exceptions to this rule. For example, property can be non-marital (even if acquired during the marriage) if it is excluded by agreement or was a gift or inheritance. Conversely, non-marital property can be transmuted into marital property if it is placed in joint names. Many other exceptions exist.

How is marital property valued?

To value marital property, the court generally determines "fair market value." Although the court uses the date of the couple's separation to identify marital assets, the presumptive date of valuation is the date of trial (or as late as possible). If one of the parties contributes non-marital property to the estate, he or she may be entitled to a credit as compensation for the non-marital contributions. And a party who, after the date of separation, pays of marital debt, may be entitled to a credit. Because "fair market value" is the standard, the value of an asset may be reduced by the amount of the owner's potential tax liability or expense to sell it. An example would be deducting closing costs from the value of a house.

How is marital property divided?

In a Pennsylvania divorce, this marital property is divided equitably between the parties. Equitably does not necessarily mean "equal," but what the court decides is a fair arrangement. Contrary to popular belief, the court does begin with a presumption of an equal distribution. Instead, the court may divide the marital estate on any percentage that is indicated by the factors (62/39, 57/43, 50/50 etc.). The court may also take into account alimony payments when deciding upon a distribution split.

Pittsburgh Divorce & Property Division

The court's decision will take into account many other factors, including minor children, the length of the marriage, the standard of living while married, the age, health, income, skills, ability to gain employment, earning power, needs, and liabilities of each party, contributions to the education, training, or earnings of the other spouse, sources of income, value of non-marital property and other factors. Each case is unique with its own variations in factors that dictate how equitable distribution is decided.

The court has the discretion to distribute property in kind or to compel one spouse to buy out the other spouse. In negotiations, a good divorce attorney will go through the 3-step equitable distribution process to determine the most likely outcome if the case were to go to trial. Anything as good (or better) than the likely outcome is a fair settlement in negotiation. Also, various points of leverage may affect the fairness of a settlement. In litigation, a good divorce attorney will understand the court's thinking and prepare a case which emphasizes the most important factors. It is best to discuss your situation regarding the division of property in a divorce directly with the divorce attorney at our firm. Call now to learn more about your legal options.