One of the biggest misconceptions I encounter as a Family Law Attorney is that all property will automatically be divided 50/50. In Pennsylvania, that’s not necessarily the case.
Pennsylvania follows a legal principle called equitable distribution, which means that marital assets and debts are divided in a manner the court determines is fair — not necessarily equal.
What Is Equitable Distribution?
Equitable distribution is the process by which marital assets and liabilities are divided between spouses during a divorce.
Generally speaking, the Court has the authority to distribute the marital estate, which includes assets and debts accumulated between the date of marriage and the date of separation, in a way it deems equitable under the circumstances.
Importantly, Pennsylvania law directs trial courts to make these decisions without regard to marital misconduct, meaning the court is focused on the financial realities of the marriage rather than assigning blame for the breakdown of the relationship.
How Does the Court Decide What’s Fair?
Pennsylvania law provides a number of factors for trial courts to consider when determining how to divide marital property, which include:
- The length of the marriage
- Whether it is a first or subsequent marriage for either spouse
- Each party’s age, health, income, and earning capacity
- The employability and vocational skills of each spouse
- Whether one spouse contributed to the education, training, or increased earning power of the other
- Each party’s opportunity to acquire future assets and income
- The standard of living established during the marriage
- The economic circumstances of each party at the time of distribution
- The tax consequences associated with the division of assets
- If there are children born of the marriage, are any of them still minors, and if so, the parties’ custodial arrangements
What Is Dissipation of Assets?
Another factor courts may consider is whether either spouse has dissipated marital assets.
“Dissipation” generally refers to the wasting or improper use of marital property.
Examples may include:
- Spending significant marital funds on gambling
- Using marital assets to support an extramarital affair
- Recklessly spending money for personal benefit after separation
- Allowing valuable property to fall into disrepair
For instance, if a spouse remains in the marital residence and knowingly ignores a serious roof leak that ultimately causes substantial damage to the home, a court could view that as a dissipation of a marital asset.
It’s More Than Just Dividing Property
Equitable distribution involves much more than simply assigning values to bank accounts and retirement plans.
Courts must also consider the practical and financial consequences of dividing assets. For example:
- Costs associated with selling a marital residence
- Outstanding mortgages or liens
- Real estate transfer taxes
- Potential capital gains tax consequences
- Other transaction costs that may impact the true value of an asset
The goal is to evaluate the complete financial picture and arrive at a distribution that is fair under the specific circumstances of the case.
The Bottom Line
Equitable distribution is not a mathematical formula, nor is it automatically a 50/50 split. Instead, Pennsylvania courts carefully evaluate a variety of economic factors to determine what constitutes a fair division of marital assets and liabilities.
Every family has a unique financial story, which is why the outcome of one divorce may look very different from another.
If you have questions about how equitable distribution may affect your rights, Michael Rovito and the Family Law team at MacElree Harvey are available to help you understand your options and navigate the process with confidence.
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