Craig Zotter & Associates
Marital Property Defined
Generally speaking, marital property is all assets acquired during the marriage. The marriage is most often considered to be from the date of the marriage to the date of separation. Thus, assets acquired during this period of time, regardless of title, are considered marital property. Therefore, a car purchased during the marriage and titled in one spouses name only is considered marital property. Examples of assets include property and income acquired during the marriage. A home, a business, furniture, savings accounts, 401K and other retirement accounts, and other investments acquired during the marriage. An assit may still be a marital asset even if it was acquired in only one spouse's name, as long as it was acquired during the marriage. Of course there are exceptions, such as inheritances, to the above rule.
Some assets may be a marital asset with a non-marital component. In that case, the non-marital value of the asset is excluded from the equitable distribution process. Appreciation of a non-marital asset is also considered marital property. For example, when one party comes into a marriage with a paid off home, keeps that home in their name throughout the marriage, the home remains their asset. However, the appreciation of that home during the marriage is considered marital property. Therefore, a paid off $200,000 home on the date of the marriage worth $500,000 on the date of separation now has $300,000 of appreciation. The $300,000 is considered marital property.
Marital Property Valued
The complexity of a case impacts how property value is determined. Divorces involving short marriages and few assets often are resolved more quickly than longer marriages with more assets. In a short marriage the fewer assets, marital property values may be determined through statements provided by the spouses. However, the majority of divorces value assets through a discovery process involving interrogatories [written questions] and depositions [actual interviews] of the parties. Finally, some more complicated divorces that involve assets such as a Business/Partnerships, Real Estate, Stock Options or Retirement Accounts may necessitate the need of litigation and hiring of an expert for the purpose of valuation and testimony at trial.
The court generally values marital property at fair market value on the date of the trial. If that is not possible then valuation will be determined using the latest possible date. The value of an asset, such as a home, may be reduced for potential liabilities the owner may incur in the future such as closing costs and tax liabilities.
Marital Property Division
When deciding how to divide marital property the court will take into consideration numerous factors that include:
Whether marital assets are income producing...and more
Pennsylvania law may allow nonmarital property to escape the equitable distribution process. Nonmarital property includes property that a spouse brought into the marriage and kept separate during the marriage, inheritances received during the marriage and kept separate during the marriage, and property excluded by a valid prenuptial agreement. In addition, nonmarital or separate property may include gifts received by just one spouse during the marriage. But, remember, under Pennsylvania law, the increase in value of a nonmarital asset during the marriage can be considered a marital asset if the increase in value was not excluded from consideration in a prenuptial agreement. Furthermore, if a husband or wife decides to use some nonmarital funds for a common purpose, such as purchasing a home in joint tenancy, that money normally will become marital property.
Once these factors are considered, the court will then divide the marital assets equitably. This does not necessarily mean equally. The court could determine 'equitable' to mean that a 50/50 division of the marital property is appropriate. However, it could just as easily determine that a 60/40 or 70/30, or another other amount of division is appropriate. This is why having experienced professionals attorneys, like the attorneys at Craig Zotter & Associates are crucial to your long term financial future. It is critical that you obtain reliable legal counsel.
Marital Debts
During the marriage most couples will acquire some debt. Like assets, the marital debts are also divided between the parties. A marital debt is a debt that was acquired by the parties after the date of the marriage but before the date of final separation. Marital debts include such items as mortgages, loans, credit card balances, tax obligations and judgments. A debt may be a marital debt even if only one of the parties contracted for the debt as long as the debt was contracted for during the marriage.