Written By:
Divorce.com Staff
Equitable Distribution: What It Means and Where It Applies
Equitable distribution is the method many states use to divide marital assets during a divorce. While some couples are able to divide property on their own—or with the help of mediation—courts step in when an agreement cannot be reached.
When that happens, judges apply equitable distribution principles to determine how marital assets and property should be divided. Understanding how this system works can help you better anticipate how your divorce may unfold.
What Is Equitable Distribution?
In most states, marital assets are divided according to equitable distribution, not community property rules.
Equitable distribution means property is divided fairly, based on factors the court considers relevant. This is different from community property, where marital assets are generally split equally.
Importantly, equitable does not necessarily mean equal. Courts look at the specific circumstances of the marriage and divorce to determine what division is fair.
Because equitable distribution laws vary by state, this section provides a general overview. Always review your state’s specific statutes or consult legal counsel for precise guidance.
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Factors That Influence Equitable Distribution
Courts typically evaluate a combination of factors when dividing marital property. Common considerations include:
Age and health of each spouse
Each spouse’s contributions and expenses
Education level
Employability and earning capacity
Financial needs
Future medical and living expenses
Income sources and spending habits
Standard of living during the marriage
Tax consequences
Below is a closer look at how these factors are applied.
Age and Health
A spouse’s age and health may influence the division of assets. If one spouse cannot work due to health limitations or advanced age, they may receive a greater share of marital assets.
Each Party’s Contributions
Courts consider both financial and non-financial contributions, including:
Income and financial support
Labor and household contributions
Support that helped increase the other spouse’s earning potential
Education
Differences in education may affect asset division. A spouse with higher education or stronger earning potential may receive fewer assets if the court determines they can more easily become financially independent.
Employability
Judges examine each spouse’s employment status, career prospects, job skills, and earning potential. Courts may also consider:
Time required for retraining or education
Employment benefits such as retirement accounts, IRAs, or stock options
Financial Needs
A spouse’s financial obligations—such as debt, student loans, or the need for transitional support—may influence asset distribution. Temporary spousal support or long-term alimony may be used to help a spouse become financially self-sufficient.
Future Medical and Living Expenses
Courts may award alimony to help cover anticipated medical or living expenses. Factors influencing alimony often include:
Length of the marriage
Dependents
Ability of one spouse to pay
Alimony is generally taxable income to the recipient.
Income and Spending
Courts review both current and passive income sources, including:
Employment income
Investments and capital gains
Rental properties
Spending and saving habits may also be considered.
Standard of Living During the Marriage
Judges evaluate the lifestyle established during the marriage and each spouse’s contributions, including:
Childcare
Housework
Educational support
A spouse’s conduct may be relevant only if it directly impacted marital finances.
Tax Consequences
Tax liabilities incurred during the marriage are usually considered marital debt. Courts may divide tax obligations and consider tax consequences tied to specific assets, which can affect their overall value.
What Property Is Exempt from Equitable Distribution?
Property is typically classified as either separate property or marital property.
Separate Property
Separate property generally includes:
Assets acquired before the marriage
Gifts or inheritances received during the marriage
Some states exclude separate property from division unless it was commingled or jointly titled.
Marital Property
Marital property includes assets acquired during the marriage, such as:
Real estate
Investments
Vehicles
Lottery winnings
Life insurance policies
Separate property that increases in value due to marital efforts may also be treated as marital property.
Frequently Asked Questions About Equitable Distribution
What Is Distribution by Mutual Agreement?
Distribution by mutual agreement occurs when both spouses agree on all divorce terms, including:
Division of property and debts
Child custody and support
Spousal support
This approach—often called an uncontested divorce—is usually faster, less expensive, and less adversarial.
Does Marital Misconduct Affect Equitable Distribution?
Forty states consider marital misconduct during equitable distribution
Twenty-eight states consider misconduct when determining spousal support
Examples of marital misconduct may include infidelity, addiction, financial misconduct, or criminal behavior.
Does Equitable Distribution Apply to All Property?
Equitable distribution applies to marital property, not separate property. Exceptions may exist if separate property was commingled or increased in value due to marital efforts.
Which States Use Equitable Distribution?
Most states apply equitable distribution. The only states that do not use equitable distribution—and instead follow community property rules—are:
Arizona
California
Idaho
Louisiana
Nevada
New Mexico
Texas
Washington
Wisconsin
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Final Thoughts
Every divorce is evaluated on a case-by-case basis. Because equitable distribution laws vary by state, consulting an attorney is the best way to obtain accurate, current guidance.
It’s also important to note that prenuptial and postnuptial agreements can override default distribution rules. When valid, courts typically enforce these agreements as written.
This article provides a general overview of equitable distribution. Always verify your state’s specific requirements. Divorce.com offers tools and services designed to help you save time and reduce stress during the divorce process.
