Equitable Division of Property
April 19, 2016
[Ed: Originally published on Facebook.]
Yesterday we looked at “community property”. Today we will look at the property division scheme in effect in most jurisdictions: “equitable distribution” (or “equitable division”). The key word, of course, is “equitable” – which does NOT necessarily mean “equal”. For many judges, they will start out presuming an equal division is fair, but they have discretion to award whatever division they want, and so both sides will be given a chance to argue why certain property should be divided differently.
A common argument for a non-equal division of property being “equitable” is that the parties will have different needs and abilities after the divorce is over. For instance, suppose the husband has been the sole breadwinner, the wife has just recently returned to work after several years of staying home with the children, and the parties own a house. The husband has the ability to maintain the mortgage payments and other costs associated with owning the house, but the wife does not – although she can afford a smaller house, if only she can make the down payment. The court might award the wife a larger share of a savings account of the parties, so that the wife would have the ability to put that money toward a down payment for her new house, and the court might also award the house to the husband, since he has the ability to maintain the payments for the time being. On paper that might not be an equal division (maybe there is no equity in the former marital house, for instance), but the court will still have the authority to make these awards as an “equitable” distribution.
No matter how your property is divided, you will want to spend some time planning for how you’re going to manage it all on your own. This is where the “Your Post-Divorce Compass” plan can really help you.