Legal Definitions - equitable distribution

Equitable distribution is a legal principle applied in divorce cases in many states to divide the property and debts acquired by spouses during their marriage. Unlike an "equal" division, which would mean a strict 50-50 split, equitable distribution aims for a *fair* division of marital assets and liabilities, taking into account various factors specific to the couple's circumstances.

When determining an equitable distribution, courts consider a range of factors that can vary by state law. These often include:

• The length of the marriage.
• Each spouse's financial and non-financial contributions to the marriage (e.g., homemaking, childcare, supporting a spouse's career).
• The current and future earning capacity of each spouse.
• The age and physical and emotional health of each spouse.
• The economic circumstances of each spouse at the time of the divorce.
• Any debts or liabilities incurred by either spouse during the marriage.
• The standard of living established during the marriage.

The goal is to ensure that both parties are left in as fair a financial position as possible after the divorce, given the resources available and their individual situations.

Here are some examples illustrating how equitable distribution works:

• Example 1: Long-Term Marriage with Disparate Earning Capacities

  Imagine a couple divorcing after 25 years. During the marriage, one spouse focused on building a successful career, accumulating significant retirement savings and a high income. The other spouse primarily managed the household, raised their children, and worked part-time, sacrificing career advancement to support the family. As a result, the homemaker spouse has limited work experience and a significantly lower earning potential post-divorce.

  In this scenario, a court applying equitable distribution might award the homemaker spouse a larger percentage of the marital assets, or a greater share of specific assets like retirement accounts. This is because, while not an equal 50-50 split, it would be considered a fairer outcome given the homemaker's non-financial contributions to the marriage and their diminished ability to support themselves financially after the divorce compared to their former spouse.

• Example 2: Shorter Marriage with Unequal Contributions to a Business

  Consider a couple divorcing after seven years. One spouse owned a small but growing tech startup before the marriage. During the marriage, both spouses contributed to the business's growth: one as the primary developer and CEO, and the other by handling all administrative tasks, marketing, and client relations, which allowed the business to expand significantly. They also purchased a home together using funds partially derived from the business's profits.

  An equitable distribution court would first identify the increase in the business's value *during* the marriage as marital property, distinct from its pre-marital value. It would then divide this marital portion, along with the home and other assets, considering each spouse's direct and indirect contributions to the business's success and the household. The division might not be 50-50 if, for instance, one spouse's direct efforts and capital investment were demonstrably more significant in driving the business's growth, or if other factors like future earning capacity come into play. The court aims for a fair division based on their respective roles and contributions.

• Example 3: One Spouse with Significant Health Challenges

  A couple decides to divorce after 18 years. During the marriage, one spouse developed a severe chronic illness that has left them unable to work full-time and requires expensive, ongoing medical treatment. The other spouse is healthy, has a stable, high-paying job, and excellent health insurance through their employer.

  Under equitable distribution, a court might award the ill spouse a larger share of the marital assets, or specific assets that can generate income, to help cover their medical expenses and ensure they have adequate financial support for their living costs. This unequal division would be deemed equitable because it addresses the significant disparity in their post-divorce financial needs and ability to support themselves due to health circumstances that arose during the marriage.