Whenever a couple is in the process of dissolving their marriage, one of the most contentious components of it can be dividing property. As with any divorce, it is always best to try to settle matters like these amicably to avoid a drawn-out and expensive litigation process. If a couple can come to an agreement, the court will sign off on it. However, if they are unable to, the court will divide the property based on state law. Marital assets are typically distributed based on either community property or equitable distribution. Community property has been adopted as state law for dividing property in divorce cases by nine states, equitable distribution is used by 40 states, and Alaska is the only state that allows for both options. The primary difference between community property and equitable distribution is that while community property is focused more on splitting property equally, equitable distribution is intended to separate property fairly. If you and your spouse are considering a divorce, get in touch with the Sparta divorce attorneys from Paris P. Eliades Law Firm, LLC to schedule a free consultation.
What is a community property state?
Property can usually be categorized as either separate or community property in divorce cases. Community property, also referred to as marital property, is any property acquired by either spouse during the course of their marriage, regardless of who paid for it. On the other hand, separate property includes all property owned by a spouse both before and after their marriage. When it comes to community property states, the division of marital property is predicated on an even 50/50 split between both spouses. Separate property generally remains untouched, in which the main focus is ensuring that the community property is divided equally.
What is an equitable distribution state?
Most states, like New Jersey, use the concept of equitable distribution when determining how property and assets are distributed in a divorce. Unlike community property states, equitable distribution states focus more on the overall needs of each spouse when deciding how their assets will be divided. For example, even though separate property is typically left alone, a court may rule that it must be used in order to achieve a fairer arrangement. Marital property also does not start off on the preconceived notion of a 50/50 split like it would in a community property state.
The division of property, whether it is community or separate property, is based on what would be the fairest outcome for both spouses. Fairness is usually determined by numerous factors such as age, health, income, contribution to marital property, and the value of separate property for each spouse. It should also be noted that based on state laws, similar rules can apply to community property states as well.