equitable distribution

What is Equitable Distribution?

Protecting Your Assets: What You Need to Know About Equitable Distribution

When a couple decides to split up, one of the big challenges they face is figuring out who gets what. It involves the money, property, and everything else they’ve accumulated together during their time as a couple. Family courts in the United States divide property in one of two ways. One method is equitable distribution and the other is community property. 

Most states divide marital property according to what’s equitable or “fair” for both parties during a divorce. If you’re getting divorced in California, you’ll likely follow the community property rules. That means you’ll divide your property equally with your spouse, unless there are special circumstances.

Quick Summary:

  • Most states use equitable distribution, dividing property fairly based on factors like marriage length and contributions. California uses community property, where most marital assets are split 50/50.
  • Factors considered in equitable distribution include marital vs. separate property, contributions to the marriage, length of marriage, financial situations, future earning potential, health and age, standard of living, and agreements between spouses.
  • The process of equitable distribution involves Initial disclosure, valuation of assets, negotiation & settlement, trial & court intervention, and finalization.
  • Community property in California refers to assets and debts acquired during the marriage, which are generally split equally between spouses in a divorce, regardless of individual contributions or ownership.

What is Equitable Distribution?

Equitable distribution is a fair way of dividing things when a married couple decides to separate or get a divorce. It means splitting up everything they own together, like money, property, and belongings, in a way that’s fair to both people.

Fairness in divorce isn’t just about equality. It’s influenced by marriage duration, contributions, and finances. The goal is to ensure each person receives a fair share based on their needs and input into the marriage.

What are the Factors Considered in Equitable Distribution of Property?

Equitable distribution takes a closer look at your situation to ensure each spouse gets a fair share. Here are the key factors courts consider when dividing things up:

Marital vs. Separate Property

When it comes to dividing property during a divorce, it’s essential to understand the difference between marital and separate property. Here’s how to tell the difference between the two:

Marital Property

Marital property includes the assets that the couple acquired together during the marriage. This includes things like:

  • Income and earnings: Money earned during marriage is typically seen as marital property, encompassing salaries, bonuses, and profits from joint ventures or investments.
  • Assets acquired during marriage: Items acquired during marriage, like houses, cars, furniture, and savings, are generally viewed as marital property, irrespective of the buyer.
  • Debts incurred during marriage: Debts accumulated during marriage, like mortgages, loans, or credit card debts, are also seen as marital property and may require division.

Separate Property

Separate property is what each person owned before the marriage or got individually during the marriage. This includes things like:

  • Property owned before marriage: Anything you owned before you got married is considered separate property.
  • Inheritances or gifts: If you received money, property, or other assets through inheritance or as a gift during your marriage, they fall into this category.
  • Agreements stating otherwise: Sometimes, couples make agreements, like prenuptial or postnuptial agreements, that specify certain property as separate rather than marital.

Contributions to the Marriage

Courts consider what each person contributed to the marriage. This could be financial contributions, like earning money, or non-financial ones, like taking care of the home or raising kids.

Length of the Marriage

The longer the couple has been married, the more likely it is that things will be divided equally. But this isn’t always the case; it depends on other factors too.

Financial Situations

Each person’s financial needs and abilities are important. For example, if one person earns a lot more money or has a higher earning potential, they might get a bigger share of the property.

Future Earning Potential

Courts also look at each person’s ability to earn money in the future. This can affect how things are divided, especially if one person sacrifices their career for the marriage.

Health and Age

The health and age of each spouse can also be factors. For example, if one person is older or has health issues that affect their ability to work, they might get a larger share of the property.

Standard of Living

Courts consider the lifestyle the couple had during the marriage. They try to make sure both people can maintain a similar standard of living after the divorce.

Agreements Between Spouses

Sometimes, couples make agreements about how to divide their property if they ever get divorced. Courts usually try to honor these agreements if they’re fair and legal.

What is the Process of Equitable Distribution?

The process of equitable distribution follows specific steps to ensure a fair division of assets and debts during a divorce. Here’s how it works:

Initial Disclosure

The first step is for both spouses to list out all their assets, debts, income, and expenses. This is called “initial disclosure,” and it’s essential for making sure everything is accounted for.

Valuation of Assets

Next, the value of each asset and debt is determined. This could include things like houses, cars, bank accounts, retirement accounts, and even debts like credit card balances. Valuing assets helps the court decide how to divide them fairly.

Negotiation and Settlement

Once the assets are valued, the spouses can try to agree on how to divide them. They might do this through negotiation, mediation, or with the help of their lawyers. If they can agree on a fair division, they can submit their agreement to the court for approval.

Trial and Court Intervention

If the spouses can’t agree on how to divide their property, the case might go to trial. At trial, the judge will listen to both sides and decide how to divide the property based on the state’s laws.

Finalization

Once the division of property is decided, either by agreement or by the court, the final division is put into writing in a document called a “judgment of dissolution.” This document outlines who gets what and any other terms of the divorce.

How is Property Divided in a Divorce in California?

Unlike most states, California uses a system called community property to divide things up after marriage. Community property means that most things acquired during the marriage belong equally to both spouses. It’s a bit different from other states that might consider who earned more or who brought what into the marriage.

Community property is important because it determines how your assets and debts are divided during a divorce in California. It is subject to a roughly 50/50 split in a divorce. The property is divided equally regardless of other factors of the separation.

How Our California Family Law Attorneys Guide Fair Distribution

Going through a divorce and dealing with equitable distribution can be hard, but knowing how it works can make it a bit easier. If you’re going through a divorce in California, it’s a good idea to consult with our Laguna Hills family law attorney at Trevino Law who can guide you through the process.

Every divorce is different, and we’ll take the time to understand your unique situation. We’ll give you personalized advice tailored to your needs and goals. Our family law firm will be by your side every step of the way, from initial negotiations to courtroom proceedings if necessary. You can trust us to advocate for your best interests and protect your rights.

Contact us now to schedule a free consultation and let us help you achieve a fair and equitable resolution. Whether it is a divorce, domestic violence, or estate planning, our law firm will represent you.

Tips for Leaving an Abusive Relationship, Getting a Restraining Order and Building Your Life Again.

Get Your FREE Book Copy!

15 Ways to Protect Yourself When Leaving an Abusive Relationship

Mail a copy?

A guide to help make decisions about your divorce, and get peace of mind—all without leaving your home.

Get Your FREE Book Copy!

Divorce Lawyers

Trevino Law

Whether you’re dealing with legal affairs or planning for the future of your family, our Orange County family law and estate planning attorneys can help you take control of your life.

Popup Form