There are different terms in divorce courts, and equitable distribution is one of them. It’s a legal principle guiding how marital assets and debts are divided. Since divorce laws differ by state, some states use the principle of equitable distribution, while others use community property.
Sydney is an equitable distribution state. It means that during a divorce proceeding, the courts will divide all marital property fairly and equitably. It’s important to note that “fairly and equitably” doesn’t mean 50/50. Instead, it means that property distribution will be as the courts see fit but as fair as possible.
Marital and Separate Property
There are two kinds of properties that Australian law recognizes; marital and separate property. Marital property is the income and assets a couple acquire throughout their marriage. These assets can include home, cars, businesses, furniture, investment, art, or retirement accounts (401k), and they are subject to equitable distribution.
Irrespective of if the property title is in one party’s name, it’s marital property and will be equitably distributed.
Separate property includes any of the following:
The assets of each spouse before the marriage
Inheritance or gifts that one spouse receives
Property acquired after separation
Holdings in the protection of a prenuptial agreement
Certain veteran benefits
In Sydney CBD, the top family law firms Sydney omits separate property from the equitable distribution process. However, if the property’s value increases during the marriage, the increase becomes a marital asset.
Likewise, if a spouse uses non-marital funds to purchase a marital asset, the money becomes marital property. If your ex has acquired property during your marriage, you may be entitled to assets. Speak with a divorce attorney West Chester PA today.
Marital Debts
Marital Debts include any debt either couple acquires from the date of marriage to the time of separation. They may consist of credit cards, mortgage, and car loans. Even if one spouse piles up a debt alone, the other partner will share responsibility equitably.
Dividing Marital Assets and Debts
Sydne
y courts consider 11 factors when deciding how to share assets and debts. They include:
The marriage’s duration
Any prior marriages of either couple
Age, health, and employability of both couples
Standard of living during the marriage
Value of each party’s separate properties
Each couple’s source of income
Contribution of one party to the other’s training, education, or increased earning power.
Each party’s opportunity to acquire future assets
The economic circumstance of each party after the division of property, including tax implications of each asset after division
Whether one partner will serve as custodial parent for any dependents
Each spouse’s role in the acquisition, preservation, depreciation or appreciation of the marital property, including contribution as a homemaker
The court won’t consider fault or marital misconduct when dividing property. In dividing property, the court will first determine its value. The value of items like a bank account is easy to know. But other assets like houses or property will need an expert’s assessment to determine their worth.
Some spouses try to hide assets from the court, in an attempt not to share or receive more. However, a divorce attorney in Sydney, can help you locate a spouse’s hidden assets.
Conclusion
In a divorce proceeding, you may be able to agree with the other party and trade one property for the other. For instance, if you wish to keep your retirement benefits, you can give up a house or another property. In case you’re wondering how to go about it, ask your divorce attorney in Sydney.