When it comes to property distribution in divorce, many people assume that when their attorney uses the word “equitable” it means 50/50. Others have heard the horror stories of people being “taken to the cleaners” and loosing every cent to their former spouse. Although the prospect of starting a divorce action involving equitable distribution can be intimidating, there are certain rules that the court will follow when resolving the economic claims in a divorce case. This is the first in a series of posts, which will provide the basics of equitable distribution in Pennsylvania divorce cases. In most cases where parties have more than one or two significant assets, parties will need the assistance of an attorney to achieve the most effective result.
The first step in equitable distribution is to determine what is “martial property” and this subject to equitable distribution. Martial property means all property acquired by either party during the marriage and the increase in value of any nonmarital property. The statute also defines non-marital property as: (1) Property acquired prior to marriage or property acquired in exchange for property acquired prior to the marriage; (2) Property excluded by valid agreement of the parties entered into before, during or after the marriage; (3) Property acquired by gift, except between spouses, bequest, devise or descent or property acquired in exchange for such property; (4) Property acquired after final separation until the date of divorce, except for property acquired in exchange for marital assets.; (5) Property which a party has sold, granted, conveyed or otherwise disposed of in good faith and for value prior to the date of final separation; (6) Veterans’ benefits exempt from attachment, levy or seizure pursuant to the act of September 2, 1958 (Public Law 85-857, 72 Stat. 1229), as amended, except for those benefits received by a veteran where the veteran has waived a portion of his military retirement pay in order to receive veterans’ compensation.; (7) Property to the extent to which the property has been mortgaged or otherwise encumbered in good faith for value prior to the date of final separation, and; (8) Any payment received as a result of an award or settlement for any cause of action or claim which accrued prior to the marriage or after the date of final separation regardless of when the payment was received.
Although the statute makes the decision of what is and is not martial appear to be very simple, very often there is great debate over what is marital. Most often the debate centers around when the parties separated. Under Pennsylvania law, the date of separation is usually defined as the date that the initial divorce complaint was filed unless there is a date before that that can be applied. The matter of “date of separation” is often squabbled over by divorcing parties, and some times entire hearings can be scheduled for the court to determine this small but important fact.
Check back next week to find out more about how the date of separation is established. In the meantime, if you would like more information regarding marital property in Pennsylvania, contact our office in Allegheny County today!