How to Divide Assets in Divorce

How to Divide Assets in Divorce

When going through a divorce, dividing assets is often one of the most challenging and emotionally charged aspects. It’s not only about separating financial resources but also untangling years of shared lives and dreams. This article aims to guide you through the process, offering clear, practical advice on how to fairly and effectively manage this often complex task. We’ll cover key considerations, potential pitfalls to avoid, and some strategies for seeking professional help when needed.

Unmerging Your Money and Property During a Pennsylvania Divorce

In Pennsylvania, the process of dividing assets and debt during a divorce is handled through a method called equitable distribution. It’s important to note that “equitable” does not necessarily mean “equal.” Rather, it refers to a fair division of property based on different factors. One spouse may receive more than half of the joint assets if the circumstances call for such a division.

Unlike community property states, Pennsylvania follows the principle of equitable distribution. This means that our courts have the discretion to divide property in a manner they deem fair and just for both parties involved.

How Courts Divide Assets in a PA Divorce

If a settlement cannot be reached before going to court, the court will distribute the marital assets in a manner it deems fair, taking into account the specific circumstances of the case. Marital property includes possessions such as homes, cars, furniture, family businesses, jewelry, art, joint bank accounts, investments, and retirement accounts. Anything acquired during the marriage is considered marital property, regardless of whether it was purchased or titled in only one party’s name. For instance, even if your name is not listed on the title of a vehicle bought by your spouse during the marriage, you may still be entitled to half of that vehicle.

FACTORS COURTS CONSIDER IN EQUITABLY DIVIDING MARITAL PROPERTY

Regarding fairly dividing property, courts must consider factors before judgment for equitable distribution. The weight given to these factors is not predetermined, allowing the court to assign the appropriate weight as it sees fit.

It’s important to note that fault or marital misconduct is not considered during equitable distribution in Pennsylvania courts. Some of the factors used to determine equitable distribution include:

• Length of the marriage
• Previous marriages
• Age and health of both parties
• Income of both parties
• Tax implications
• Amount of non-marital assets
• Prenuptial agreements
• Custody arrangements for children, if applicable
• Contributions to the advancement of each other’s income
• Standard of living during the marriage
• Employability of both parties

The court considers these factors to achieve a fair and balanced division of property. An equitable distribution of property does not always mean that the assets will be split 50/50, as other considerations such as tax implications or prenuptial agreements may take precedence. The court assigns a value to each asset and then distributes them in a manner it deems fair based on the various factors involved in the case.

In addition to splitting marital assets, the court may also order spousal support to be paid from one spouse to another. Spousal support is a payment made from a more financially able partner to a less capable partner if it’s deemed necessary for the future well-being of one or both parties. The amount and duration of support payments are determined by a variety of factors, such as length of marriage, age,

How to Pensions and 401(k) Plans are Divided in Divorce

If you acquired any part of your pension, 401(k), stock plan, stock options, deferred compensation, or other retirement incentives during the marriage, that portion is marital property and must be shared with your spouse during divorce. You can explore options such as trading assets or reaching an agreement to preserve your pension or retirement plan. Petrelli Previtera, LLC has a network of highly qualified specialists, including Certified Public Accountants (CPA’s) knowledgeable in divorce law, pension and retirement evaluators, psychiatrists, psychologists, therapists, certified divorce financial planners, marital personal property evaluators, real estate appraisers, realtors, business evaluators, and bankruptcy counseling with consulting bankruptcy attorneys.

How is separate property treated during Divorce?

In Pennsylvania, the law permits the exclusion of specific assets from the asset division process. Any property excluded by a prenuptial agreement won’t be included. Property brought into the marriage and kept separate is also considered non-marital. Gifts received by one spouse and inheritances kept separate may also be excluded. However, if the value of non-marital property increases during the marriage, the increase may be considered during a divorce settlement agreement. If non-marital funds are used for common purchases, like home buying, they may be considered marital property. Separate property includes:

• property owned or claimed by one spouse before the marriage,
• property received as a gift or inheritance during the marriage,
• money received for personal injuries during the marriage (excluding lost wages and medical expenses),
• stock dividends and capital gains on separate property investments.

At Petrelli Previtera, LLC, we understand the challenges of asset division during divorce. Our knowledgeable team can provide you with a comprehensive review of your assets and liabilities to determine what is equitable. We have decades of experience in helping clients make informed decisions about their finances before, during, and after divorce proceedings. Contact us today for a consultation.

Questions Frequently Asked about How to Divide Assets in Divorce

What is equitable distribution of marital property under PA law?

In divorce cases, most states, including Pennsylvania, follow the legal principle of equitable distribution to divide marital property. This applies only to marital property and not separate property. Contrary to popular belief, equitable distribution does not mean an equal division of assets. Rather, it means that the courts aim to divide marital assets in a manner that is fair, taking into consideration various factors. If you have any questions regarding property division during your divorce, please don’t hesitate to reach out to our firm.

What about Individual Property?

Divorce statutes generally acknowledge that within a marriage, there are certain properties that solely belong to a spouse, rather than the marriage as a whole. In a divorce, the following types of property are typically considered separate:

1. Property owned by a spouse before the legal marriage began.
2. Gifts or inheritances received by a spouse before or during the marriage.
3. Property acquired by a spouse during the marriage, solely in their name, and not utilized by the other spouse or for the benefit of the marriage.
4. Property or debts designated as separate in a legally binding contract, such as a prenuptial or postnuptial agreement.
5. Personal injury awards, excluding any compensation for lost wages.
6. Property obtained by one party using their separate assets (e.g., inheritance funds) with the explicit intention of keeping it separate.

Although these properties are categorized as separate, you have the option to include them in negotiations with your soon-to-be ex-spouse to retain other assets that you desire to keep. For instance, you might wish to keep the vacation home while offering your spouse the boat you purchased using an inheritance from your grandmother, which you received shortly after getting married.

What factors are considered in determining fair division of property?

The courts take into account several factors to determine the division of property in each unique divorce case. These factors include:

1. Financial state and earning power of each party
2. Value of each spouse’s separate property, such as businesses, retirement plans, stocks, and bonds
3. Contribution of each spouse to the acquisition of marital property
4. Contribution of each spouse to the education and earning power of the other spouse
5. Future financial needs and liabilities of each spouse
6. Ages and overall health of each spouse
7. Liquidity of marital property
8. Existence of premarital and prenuptial agreements
9. Spousal maintenance or alimony obligations

Hidden Marital Assets

Petrelli Previtera, LLC has assisted clients in uncovering concealed assets and income that a spouse may possess, with the intention of wrongfully and fraudulently retaining a marital asset for themselves. On occasion, individuals may attempt to conceal assets to minimize their financial obligations or maximize their entitlement to support.

Our attorneys have encountered several instances where a spouse attempted to transfer funds to external bank accounts or invest in cryptocurrencies, seeking to move wealth out of reach. In cases where the family owns a cash-based business, this adds another layer of complexity. This method of operation often leads to legal complications, particularly concerning matters with the Internal Revenue Service (IRS). During a divorce, ownership and distribution of a cash-based business can create additional hurdles as couples try to resolve issues such as child support, alimony, and the division of marital property. Such scenarios underscore the importance of comprehensive financial analysis and meticulous legal counsel in securing a fair resolution.

At Petrelli Previtera, LLC, we offer tailored solutions to address such concerns, including:

• Seeking court intervention to impose a lien as security for the payment of alimony or any other awarded amount to the other party.
• Granting exclusive rights to reside in the marital property to one party, while excluding the other.
• Requesting the court to mandate one party to continue providing health insurance or life insurance coverage on behalf of the other party.
• Seeking special relief, such as injunctions or necessary orders, to prevent the removal, dissipation, transfer, or encumbrance of real or personal property.

In the event that you and your spouse are unable to agree on the division of property and debts, the Pennsylvania Divorce Code governs the resolution of your divorce. However, even if you have a prenuptial agreement that does not encompass certain rights available to you under Pennsylvania Law, there may still be opportunities to assert those rights.

Fortunately, the attorneys at Petrelli Previtera, LLC are well-versed in Pennsylvania law and have taken on clients facing cases involving hidden marital assets. Our team is dedicated to providing personalized legal solutions to meet the unique needs of each client. We are here to help you protect your rights and interests in a divorce or other family law matter.

Contact Our Lawyers to Answer Questions bout How to Divide Assets in Divorce

If you are contemplating a divorce or have questions regarding property division in your specific case, it is crucial to consult with a divorce attorney. They will guide you through the divorce process and ensure that all assets and debts are properly addressed. Contact Petrelli Previtera, LLC to arrange a consultation and discuss your rights. Dial 866-465-5395 to schedule an appointment.