Oftentimes, one of the most contentious aspects of a divorce case is the division of assets and debts accumulated during the term of the marriage. Most jurisdictions in the United States utilize what is known as the equitable division standard when it comes to divvying up property and debt in a divorce case. A minority of states utilize the community property standard.
The equitable division standards differs quite significantly from the community property process of allocation, In a community property state, barring a substantial reason to take a different course, the assets and debts of the marriage are divided equally between both spouses.
At its essence, the equitable division of property standard mandates that the assets and debts of a marriage should be allocated between the divorcing spouses in a manner that is fair and just in light of the facts and circumstances of a particular case. Equitable division does not necessarily mean equal division.
Factors Considered by a Court in Making an Equitable Division
Courts consider an array of factors in each case in which the equitable division of property standard is utilized. These factors include a consideration of the contribution made by each spouse to the accumulation of marital assets and debts as well as matters like the length of the marriage, the health of each spouse and the earning capacity of the parties to the divorce proceedings. Other factors considered by the court in equitably dividing assets and debts in a divorce case are which parent is the designated primary custodian of minor children and tax consequences associated with particularly division schemes.
In some states, and in some courts, judges consider marital misconduct when it comes to the cause of the divorce. In other instances, marital misconduct is expressly prohibited from being a consideration when it comes to the equitable division of assets and debts.
Financial Disclosure Statement
Identifying assets and debts subject to division in divorce proceedings commences with the filing of a verified financial statement or declaration by both spouses. The spouses are required by the law in every state to provide this financial data under penalty of perjury.
Only assets and debts accumulated by the spouses during the marriage is subject to equitable division in divorce proceedings. Property each spouse owned before the marriage remains that individual’s assets. Similarly, debt that predated the marriage remains the obligation of that specific spouse.