This is the second in a series of articles providing a basic overview of a specific area of Pennsylvania’s divorce process.
In Part 1, we identified the importance of getting legal advice before a divorce decree is entered because the divorce decree ends your marital status and can mean a change in legal rights and possibly a complete loss of certain legal rights. This article provides an overview of the marital property rights that end when a divorce decree is entered.
Under Pennsylvania divorce law, spouses have the legal right to request that the court divide marital property if they cannot divide it by agreement. Knowing what is and is not the marital property can be complicated. We work with our clients to identify what is marital property.
Generally, marital property is all property acquired by either spouse during the marriage (from the date of marriage to the date of separation). This includes real estate, bank accounts, cars, household furnishings, investments, retirement accounts, etc. Property acquired during the marriage is presumed to be marital property regardless of if it is in one spouse’s name or in both spouses’ names. For example, a vehicle that was purchased during the marriage can be marital property even if it is titled in just one spouse’s name.
Marital property generally does not include a spouse’s property acquired prior to the marriage and kept in that spouse’s sole name; property excluded by agreement of the spouses, such as a prenuptial agreement; property acquired by gift (except between spouses) or inheritance; and certain other forms of property. That property is called “non-marital property.” This can be a complex area and you should discuss this area with us to confirm if an asset is non-marital.
Generally, only the increase in the value of the non-marital property during the marriage can be considered marital property. For example, if one spouse had a 401(k) at the date of marriage with a $50,000.00 value and it increased to $150,000.00 during the marriage (without any additional contributions), the $100,000.00 increase could be marital property to be divided in the divorce.
When you meet with us, we recommend that you bring a list of assets with estimated values. If there is a loan on any of the assets, such as a mortgage on a home or a loan on a car, that loan balance should also be listed. We discuss with our clients the valuation of assets and various factors to consider in valuing the marital property.
Equitable Division of Marital Property
Once you know what the marital property is and its value, the next question to consider is how to divide that property fairly. Pennsylvania divorce law provides that marital property is divided between spouses equitably. It requires that the court consider 11 separate factors. It does not require that marital property be divided equally. Marital property can be divided with one spouse receiving more value than the other. We advise our clients on an appropriate equitable division of marital property and attempt to reach an agreement with the other spouse to avoid having the court divide it.
If the spouses cannot agree, a divorce master can be appointed to hold hearings on what each spouse believes the distribution should be and will issue a report after that hearing. At the hearing, the divorce master will hear testimony and receive evidence on all relevant property division factors including the length of the marriage; the age and health of the spouses; the standard of living during the marriage; and the economic circumstances of each spouse at the time of the division. The divorce master process can be an expensive proceeding, and many cases settle to avoid that expense and uncertainty. We advise our clients at this step of the divorce and represent clients throughout the divorce master process which can include appeals of that equitable division of marital property.
It is very important that you speak with a lawyer about your property rights prior to the finalization of a divorce, as marital property rights generally terminate when a divorce is finalized. If you have questions about divorce or about any other domestic issues, such as child custody or support, please contact the attorneys in our family law practice group.