Equitable Distribution

•· What do you mean by "Equitable distribution? In a dissolution of marriage proceeding the parties (or the court) will set apart to each spouse that spouse's non marital assets and liabilities. Then the parties, or the court, will divide all the remaining assets and liabilities (the marital assets and liabilities) between the parties in such proportions as are equitable and fair. In distributing the marital assets and liabilities between the parties, the court must begin with the premise that the distribution should be equal, unless there is a justification for an unequal distribution.

•· What criteria does the court use in determining if there is a justification for an unequal distribution of the marital assets and liabilities? The court will be considering all relevant factors, including: (a) the contribution to the marriage by each spouse, including contributions to the care and education of the children and services as homemaker; (b) the economic circumstances of the parties; (c) the duration of the marriage; (d) any interruption of personal careers or educational opportunities of either party; (e) the contribution of one spouse to the personal career or educational opportunity of the other spouse; (f) the desirability of retaining any asset, including an interest in a business, corporation, or professional practice, intact and free from any claim or interference by the other party; (g) the contribution of each spouse to the acquisition, enhancement, and production of income or the improvement of both the marital assets and the non marital assets of the parties; (h) the contribution of each spouse to the incurring of liabilities to both the marital assets and the non marital assets of the parties; (i) the desirability of retaining the marital home as a residence for any dependent child of the marriage, or any other party, when it would be equitable to do so, it is in the best interest of the child or that party, and it is financially feasible for the parties to maintain the residence until the child is emancipated or until exclusive possession is otherwise terminated by a court of competent jurisdiction, (j) the intentional dissipation, waste, depletion, or destruction of marital assets after the filing of the petition within 2 years prior to the filing of the petition, (k) any other factors necessary to do equity and justice between the parties.

•· Are the earnings that I made with my blood, sweat, and tears during the marriage (and the assets that I purchased with these earnings) considered marital assets even though my spouse did not participate in the earnings or investments at all? Yes. All assets acquired and liabilities incurred during the marriage, individually by either spouse or jointly by them are marital assets and liabilities under the statute.

•· What about the assets (and liabilities) that I owned prior to the marriage and have continued to own during the marriage and by my sole work and effort caused to increase in value? That portion of the enhancement in value and appreciation of non marital assets that results either from (a) the efforts of either one of the parties during the marriage, or (b) from the contribution to or expenditure thereon of marital funds or other forms of marital assets, or both, are marital assets subject to equitable distribution.

•· Are the birthday, anniversary or holiday gifts that I gave to or received from my spouse during the marriage included in "marital assets and liabilities" which are subject to equitable distribution? Yes. Any gifts given by either spouse to the other spouse during the marriage are marital assets for purposes of equitable distribution.

•· What about the pension, profit sharing and retirement plans that we own? Are they also subject to equitable distribution? All vested and non vested benefits, rights, and funds that accrued during the marriage in retirement, pension, profit-sharing, annuity, deferred compensation, and insurance plans and programs are marital assets and subject to equitable distribution. Retirement benefits are often one of the most valuable assets a married couple accumulates. The attorneys of Rubinstein, Holz & King, P.A.'s, and our consultants, are able to provide advice concerning the appropriate valuation and division of retirement plans.

•· What about the house that I owned before our marriage but later transferred into both of our names during our marriage? The court will probably decide that the house is a marital asset. Under the statute - all real and personal property (land and buildings and "things") held by the parties as tenants by the entireties, whether acquired prior to or during the marriage, shall be presumed to be a marital asset". The statute requires that if a party makes a claim that some real property is not a marital asset, then the burden of proof shall be on the party asserting the claim for the special equity to prove that it is not a marital asset. The statute also provides that all assets acquired and liabilities incurred by either spouse subsequent to the date of the marriage and not specifically established as non marital assets or liabilities are presumed to be marital assets and liabilities. Such presumption is overcome by a showing that the assets and liabilities are non marital assets and liabilities.

•· What about the things that I owned before our marriage? The general answer is that they are non marital and are not subject to equitable distribution in the dissolution of marriage proceeding. Under the statute all assets acquired and liabilities incurred by either party prior to the marriage (and assets acquired and liabilities incurred in exchange for such premarital assets and liabilities) are non-marital assets and liabilities and not subject to equitable distribution. There are exceptions to this general rule such as where a party co-mingled their non marital assets and liabilities with marital assets and liabilities or made gifts of their non marital wealth to their spouse, for example by putting the non marital asset into a joint bank account or jointly titling it.

•· Is the income that I derived from my separate non-marital assets during our marriage subject to equitable distribution? Generally not unless (1) it was treated, used or relied upon by the parties as a marital asset or (2) the income was derived from your work effort.

•· My brother (or friend, or parent) gave me a gift during my marriage, is that a marital asset? No. That would normally be a non-marital asset. Under the statute assets acquired separately by either party by non-interspousal gift (and assets acquired in exchange for such assets) remain non marital in nature. However they may become marital property if you made a gift to your spouse or commingled them with marital assets. For instance, commingling by depositing cash into your and your spouses joint account where each of you had access to the funds - funds so intermingled lose their separate identity and become untraceable and thus are generally considered to be marital. Would the answer be different if the gift was to both my spouse and I? Yes. Then the gift would be to the marital unit and be a marital asset.

•· If I inherited an asset during my marriage, will my spouse be able to claim part of that in our dissolution? Normally not. Assets acquired separately by either party by bequest, devise, or descent (and assets acquired in exchange for such assets) are non marital property and not subject to equitable distribution. However they may become marital property if you made a gift to your spouse or commingled them with marital assets.

•· I have a premarital agreement that excludes all my premarital assets from any claim by my spouse. Is that agreement binding and will it protect me? Probably yes. All assets and liabilities excluded from marital assets and liabilities by valid written agreement of the parties (and assets acquired and liabilities incurred in exchange for such assets and liabilities) are non-marital assets and liabilities under the statute.

•· What is the termination date that the court will use for determining our marital assets and liabilities? The court will generally use the earliest of (a) the date the parties enter into a valid separation agreement, (b) such other date as may be expressly established by the parties in their separation agreement, or (c) the date of the filing of a petition for dissolution of marriage, (d) unless the trial judge determines another date is just and equitable under the circumstances.

•· What is the termination date that the court will use for determining the value of our marital assets and liabilities? The date for determining value of assets and the amount of liabilities identified or classified as marital is such date or dates as the judge determines is just and equitable under the circumstances. Different assets may be valued as of different dates, as, in the judge's discretion, the circumstances require.

•· If one of us gets the entire family interest in a key marital asset intact and free from any claim or interference by the other party (such as an interest in our business, corporation, or professional practice), this would upset any equitable distribution. How should we or the court deal with this problem? To do equity between the parties, the court may, in lieu of or to supplement, facilitate, or effectuate the equitable division of marital assets and liabilities, order one party to pay to the other party a monetary payment in a lump sum or in installments paid over a fixed period of time.

•· Even after all the work by the court in fashioning an equitable distribution of our assets and liabilities, the result may not be adequate or fair to one or both of us. Are there any additional tools available to us or the court to further fine tune an agreement or ruling? Yes. Equitable distribution is just one tool available to the court and the parties. Additional tools include alimony, child support, exclusive use of property, etc.