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If your divorce case goes to court in an equitable distribution state, a judge hears evidence and reviews many factors to determine how to divide your assets and debts — it’s not always 50/50. Over 40 states follow equitable distribution laws. And there are ways to get the most out of it.
Equitable distribution, also known as the equitable division of property, is a legal principle centered around how the property you’ve acquired during a marriage should be split up in a divorce. Instead of a 50/50 separation, courts weigh many factors when dividing your assets and debts.
Over 40 states are equitable distribution states — also known as common law states — that recognize the equitable distribution of marital property. The one exception is Alaska, which gives spouses the option to follow equitable distribution or community property rules.
Most divorcing couples try to come to an agreement about how to divvy up their property outside of court. You can use a mediator to help facilitate negotiations or hash it out over the kitchen table.
If you can’t agree and end up in court, a judge uses equitable distribution to guide property distribution. The court decision is final and out of your control. Going to court for equitable distribution is generally a last resort.
Here are nine variables courts consider when determining what to give each spouse:
Premarital property is yours to keep, whereas you and your spouse share marital property. Knowing the difference will help you determine which property to include in your divorce agreement.
|Premarital property||Martial property|
|Definition||Premarital property — also known as separate property — is the assets and debts that you had before marriage.||Marital property is everything you and your spouse acquired during the marriage, except if the property was a gift to one spouse, an inheritance from a third-party or explicitly excluded by a valid agreement.|
Community property laws dictate that both spouses equally own all marital property. So in a divorce, you’ll split everything right down the middle.
On the other hand, equitable distribution divides the property fairly, depending on each spouse’s situation. There is no set rule governing what each spouse receives. For example, courts may split your marital property 40/60 or 70/30.
The nine community property states include:
If your divorce case goes to court, a judge splits your property according to equitable distribution laws. Here are a few tips to get the most out of equitable distribution:
Use an online divorce service to help fill out your divorce forms.
If you and your spouse can’t agree on how to divide your assets and debts, consider going to mediation to avoid court. If you still can’t agree and file for divorce in an equitable distribution state, a judge divides everything according to a variety of factors like your earning power, how much you contributed to your marital property and who has custody of your children.
Read our guide to getting divorced for more tips on how to protect your finances in a divorce.
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