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What is Equitable Distribution in a Divorce? Who Owns What and Who’s Liable for Debt?

By Jose Medina, Esq. | Divorce

Mar 26
Equitable distribution in a divorce depicted with judge.

Equitable distribution in a divorce may not be what you think.

Oftentimes, people believe that the assets they purchased belong solely to them. However, the court views the equitable distribution of assets and liabilities which are acquired during the marriage as belonging to the marriage. That means both spouses are financially responsible for the assets and liabilities while married to one another. There are exceptions but this is the general rule.

The Court starts with a presumption that an equal split is the right way to divided assets and liabilities between spouses during a divorce. However, while retirement plans, 401(k)s, IRAs, etc. are subject to division any non-marital (premarital) portion is not divided equally between the parties. That means any portion that was earned before the marriage belongs exclusively to the individual who acquired it. Figuring out just how much is pre-marital can be tricky.

Notably, it does not make a difference whether a liability (such as a student loan) benefits only one party. That means you may be responsible for partial payment of your spouse’s student loans as well as car loans and credit card debt.