Equitable Distribution: Where It Applies and What It Means

Equitable distribution is used in many states when determining a fair allocation of marital assets between both parties. Some parties may choose to try and divide marital assets on their own or with mediation.

If that proves unsuccessful, it will be up to the courts to decide how to split marital assets

and property through equitable distribution. Learn more about equitable distribution and how it may affect or impact

your divorce.

What Is Equitable Distribution?

In most states, the division of marital assets is typically based on what is known as

“equitable distribution.”

Equitable

distribution is essentially the division of property between spouses

according to factors that the state courts deem relevant. It is different from community property,

where

spouses get an equal distribution of property.

What is equitable is not necessarily an equal division of assets. Depending on the

circumstances, a list of factors will typically be used to determine what each party in a divorce receives.

Characteristics can include the length of the marriage, whether minor children are involved, the employment

status of each spouse, and what each party brought into the marriage.

Before we dive in, it’s important to note that the specific laws governing equitable

distribution vary by state. We’ll give a general overview below, but double-check your state’s guidelines

for more information.

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What Factors Influence Equitable Distribution?

Below is a common list of elements used in determining the division of assets.

• Age and health

• Each party’s contribution and other’s expenses

• Education

• Employability

• Financial needs

• Future medical and living expenses

• Income and spending

• Standard of living during the marriage

• Tax consequences

• Age and health

• Each party’s contribution and other’s expenses

• Education

• Employability

• Financial needs

• Future medical and living expenses

• Income and spending

• Standard of living during the marriage

• Tax consequences

Age and Health

Each spouse's age and health will influence the equitable distribution process. If a spouse

is unable to work due to health issues or is incapable of work due to age, they may be rewarded a greater

amount of marital assets.

Each Party’s Contribution to the Other’s Expenses

Contributions or efforts of either party in a marriage can impact the value of marital

assets. Contributions or efforts can include labor, support, or money. It can also have help made by either

spouse to support the increase of the other spouse’s earning potential.

Education

Spousal education level can be a common factor when determining the division of marital

assets. For example, one spouse may have more education than the other, and therefore it would possibly

result in that spouse receiving fewer assets in the divorce since they could easily earn more following the

split.

Employability

The employment status of each spouse and their respective careers can also be a factor when

determining the distribution of assets between both parties. It is often a debate on the value in which each

spouse’s career contributes to the marriage.

The court will normally consider earning potential, job skills, and the time it’ll take for

either spouse to get training or education to become employed. Benefits from one spouse’s career can also be

subject to distribution, such as IRAs, retirement accounts, stocks, etc.

Financial Needs

The financial needs of each spouse, including debt, student loans, and general financial

assistance needed following a divorce, are also commonly taken into account. Spousal support is often an

initial step after filing toward a spouse becoming financially self-sufficient. After the finalization of a

divorce, alimony is often a common form of financial support from one spouse.

Future Medical and Living Expenses

Alimony may be distributed to help with both future medical and living expenses. Many factors

may determine alimony, such as the length of the marriage, dependents, or ability to pay. It is important to

note that money from alimony is considered taxable.

Income and Spending

The sources of income available to each party are also a component when it comes to equitable

distribution. The court will look at passive and immediate incomes such as investments, capital gains,

career earnings, and rental properties. Both spending and saving habits are also taken into

consideration.

Standard of Living During Marriage

The standard of living is determined by looking at the lifestyle of both parties throughout

the marriage. Both spouses’ contributions to the marriage, including housework, childcare, and assistance

with education, help to determine the division of assets. A spouse’s behavior is relevant if it has impacted

the other spouse’s finances.

Tax Consequences

Income tax liability incurred during the marriage is generally considered marital debt.

Courts will most likely distribute tax liabilities between both parties. It is important to remember that a

tax liability may be associated with assets allocated to each spouse. This tax liability can impact the

value of assets awarded through equitable distribution.

What Property Is Exempt from Equitable Distribution?

Property is often divided into two categories: separate or marital.

Separate property is the property that belongs to one spouse.

Examples include assets acquired or inherited before the marriage or assets acquired during the marriage

through a gift or inheritance. Some states allow the separate property to be excluded throughout equitable

distribution unless it was put in the name of both parties.

Marital property is property acquired during the marriage, such as lottery winnings, real

estate, investments, vehicles, life insurance policies, etc. This can also include separate property that

has increased in value due to the efforts of one or both spouses.

FAQs of Equitable Distribution

What Is Distribution by Mutual Agreement?

Distribution by mutual agreement implies that both parties agree to the divorce and the terms

set forth. This includes the agreement on the division of marital property; debts acquired, child custody

and support, and alimony.

The benefits of a mutual agreement divorce include a shorter and more straightforward process

while often being much more civilized. This is also

known as an uncontested divorce.

Does Marital Misconduct Affect Equitable Distribution?

Forty states consider marital misconduct throughout the process of equitable distribution. Twenty-eight states consider marital misconduct when determining spousal support or alimony.

Infidelity, addiction, financial misconduct, and criminal misconduct can all be grounds for marital misconduct.

Does Equitable Distribution Apply to All Property?

Property is divided into two categories: marital and separate. Equitable distribution applies

to the allocation of marital properties. There are some exceptions to this, such as separate property that

has increased in value due to the efforts of one or both spouses or unless they choose to share separate

property.

Which States Have Equitable Distribution?

The majority of states utilize equitable distribution.

This means the court considers each party's assets their own unless the couple has decided to share or

divide them.

All states utilize equitable distribution in case of a divorce except:

• Arizona

• California

• Idaho

• Louisiana

• Nevada

• New Mexico

• Texas

• Washington

• Wisconsin

• Arizona

• California

• Idaho

• Louisiana

• Nevada

• New Mexico

• Texas

• Washington

• Wisconsin

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Final Thoughts

Each divorce is looked at on a case-by-case basis, and it is important to consult a lawyer for the most accurate and up-to-date information.

It should be noted that couples can have a prenuptial or postnuptial agreement with a

division of assets. In that event, couples would normally be ground to what they have agreed to. These

contracts between spouses provide for the division of assets in advance.

This article is considered a general overview of equitable distribution. It is important to

check your individual state’s requirements for the most up-to-date information. Divorce.com offers services

so you can save time and alleviate stress.

equitable distribution | Wex | US Law | LII / Legal Information Institute | Cornell Law School

separate property | Wex | US Law | LII / Legal Information Institute | Cornell Law School

Equitable Distribution: Definition and State List | SmartAsset