Divorce, Property, and Income-Earning Assets
Larger and more valuable assets, such as real property, are often the biggest concern of those facing divorce. Many are worried about losing their substantial assets, particularly if a large part of their personal income is derived from those assets.
In Pennsylvania, family courts practice “equitable distribution”, meaning that the judge makes a fair split of marital property, based on a set of factors. A key factor is whether a particular asset qualifies as marital property.
Real Property and Assets in a Pennsylvania Divorce
If you are seeking to terminate your marriage and you’re concerned about large assets like real estate and financial holdings, our West Chester divorce lawyers at Ciccarelli Law Offices can help protect your best interests. Our experienced legal team will work together to diligently research your assets and give you an honest assessment of your options.
Call (610) 692-8700 or send an online message for a free consultation so we can act as soon as possible. We are based in West Chester PA and serve clients throughout Chester County, Lancaster County and suburban Philadelphia including West Chester, Kennett Square, Oxford, Avondale, Landenberg, West Grove, Paoli, Malvern, Downingtown, Coatesville, Exton, Parkesburg, Berwyn and Devon. We have convenient meeting locations in Lancaster, Philadelphia, Plymouth Meeting, Kennett Square, Malvern, Springfield, King of Prussia, and Radnor. Our family lawyers serve those with immediate legal needs in Chester County, Montgomery County, Delaware County and Lancaster County.
Property and Income During a Divorce
Equitable Distribution of Property in Pennsylvania
Pennsylvania courts use equitable distribution when dividing marital property after a divorce. This means that the court looks at several factors and determines a fair division of property among the spouses. This is different from equal distribution or community property — the court may give very different amounts to the two spouses. The judge can also look at each item separately and assign a different percentage of ownership for each item.
Some of the factors the court may use in determining how to divide real property, assets or income that qualifies are:
- The duration of the marriage.
- Any prior marriage.
- The age, health, skills, employability, estate, liabilities and needs of each party.
- The opportunity for each party for future acquisitions of assets and income.
- The sources of income for each party.
- The contribution or dissipation of each party in the acquisition, preservation, depreciation or appreciation of the asset.
- Tax ramifications.
Fault in the marriage termination is not a factor that can be considered when determining distribution of marital assets. A key factor for larger assets, many times, is the contribution of each party. If one spouse had much more to do with an increase in the value of property than the other, the judge is more likely to award a greater share to that spouse.
Determining What is Considered Marital Property
Any realty acquired during the marriage is marital property, and is subject to equitable distribution. Anything either of the spouses owned before the marriage is separate property. Additionally, anything that is a gift to one of the spouses, including anything that is willed or probated, is generally considered separate property and cannot be considered for distribution.
However, any increase in the value of separate property is marital property and can be divided among the spouses.
For example, Spouse A owned an empty lot when he and Spouse B were married. The lot was in the middle of nowhere and worth $20,000 at the time. Since the marriage, residential developments were built on either side, and commercial developers are clamoring to get their hands on the property. It’s now worth $120,000. Spouse A and Spouse B are getting divorced. While $20,000 of the property will be Spouse A’s separate property, of which none can even be considered for going to Spouse B, $100,000 worth is marital property.
Additionally, any income from separate property during the marriage is marital property. For instance, Spouse B owned an apartment complex when she married Spouse A. While they were married, she collected $500,000 worth of rent from the apartment complex. At divorce, the apartment complex is Spouse A’s, but the $500,000 is marital property.
Stocks, bonds and other financial instruments work the same way. While the asset itself is separate property if owned before the marriage, any increase in value, in addition to any dividends, interest earned or other income, is marital property.
It’s difficult to split ownership on many assets. Those assets could be liquidated, or one of the spouses could be required to give up cash value or assets of equal value. There are many ways that your divorce lawyer can negotiate the division. Oftentimes, outside financial experts are consulted to ensure proper valuation.
Income and Assets During a Chester County PA Divorce
If you have assets like real estate or stocks, it’s important to do a legal analysis of whether those assets are marital property and what an expected distribution might entail. Our West Chester divorce lawyers can make that analysis for you.
Ciccarelli Law Offices is proud to continue serving the towns and cities of Downingtown, Phoenixville, Landenberg, Villanova, Norristown, Media, Ardmore, Swarthmore, Newtown Square, Radnor, Devon, Berwyn, Greater Philadelphia. Call us at (610) 692-8700 today for a free consultation to discuss the details of your case.