If a divorcing couple cannot agree on how their property should be divided, the court steps in. Pennsylvania is an equitable distribution state, which means that the Court of Common Pleas will disburse marital assets in an equitable manner. You may think that this means a fifty-fifty distribution, but that might not be what the court deems to be fair.
Factors affecting property division
The distribution of marital property is usually the most important consideration in a divorce, especially for wealthy couples. Property usually refers to items such as the marital home, pensions and retirement accounts that were acquired by the spouses during their marriage. Any property transfers are subject to income taxes and, in some cases, gift taxes. When considering property division, the court will take into account factors such as the length of the marriage, the earning power of each spouse, the separate responsibilities they have with regard to child rearing, the need for retraining to make one of the parties employable and whether a prenuptial agreement exists. Other factors may include the age and health of each spouse, the standard of living established during their marriage, their separate economic circumstances and whether either party will have custody of minor children.
The procedure followed by the court
The court will first divide property by classifications: assets and liabilities, property and debt, marital or separate. A monetary value will then be assigned to marital property and marital debt. Once this has been established, the court will make a distribution. In general, assets will be valued at the time they are divided between the spouses; however, the court has the final say in selecting a fair valuation date.
Disposition of the biggest marital asset
Equity in the family home is usually the biggest asset to be divided during a divorce. The first step is to determine market value at the time of separation by the couple, minus any debts or liens. A real estate agent or appraiser may be of assistance in preparing a market analysis. Once the current market value is agreed upon, the couple can choose the way forward from among several options. They can sell the home and divide the proceeds, one of the spouses may refinance and buy the other spouse out, or it will be agreed that one spouse, usually the custodial parent, will remain in the home for a certain period of time; for example, until a child graduates from high school.
Seeking legal help
If you are contemplating divorce, you no doubt have many questions and concerns, including how the distribution of your marital assets will be handled. This is the time to turn to an attorney who practices family law. An experienced lawyer is standing by to offer advice, support and guidance to help make the transition you are considering as smooth as possible.