An equitable division does not automatically mean an equal division. In a divorce, the court must divide the marital property between the parties equitably, considering more than a dozen factors.
An equitable division of property is “fair” – as determined by a court – after considering the circumstances of the couple. If a couple can agree on how they want to divide their property, a court will likely approve the terms to which the parties have agreed. However, when a couple cannot agree on how to divide their property, the court will determine what is fair between the two.
What happened in someone else’s case does not matter to the court. It considers only the facts presented in the case at hand. Here are some factors the court considers when determining equitable division of property.
Length of the Marriage
One factor is the length of the marriage. If a marriage is short-term, just a few years, it is a lot easier for a court to allow each party to take what they brought into a marriage back out of it. When a couple has not acquired a lot, or if they have kept their finances separate, a court is likely to find it most “fair” to let the parties leave the marriage with what they brought to it.
The longer the marriage, the less likely each will get out with what they brought in. And what each brought to the marriage is also a factor. Again, the court considers the premarital property, but there is no guarantee it will leave with the one who brought it.
Your Contribution to the Marriage
Another factor requires the court to examine the contribution of each party to the marriage, giving appropriate economic value to each party’s contribution to maintaining the home and caring for the children. You may think, “Wait, doesn’t that apply to alimony and child support?”
That is true, but if one spouse worked in a traditional job outside of the home during the marriage and acquired the retirement funds in their name while the other party was a stay-at-home parent and had no retirement accounts in their name, the court may divide these between the parties differently than it would divide retirement accounts between two parties who both had retirement funds in their own names.
Ability to Work or Regain Wealth
The age, physical health and emotional health of the parties all matter. These may affect the ability of a party to grow their own wealth individually following the divorce, and this may be important for the court in a case.
The court may also consider the contribution of one party to the education, training, or increased earning power of the other along with the earning capacity of each party, including educational background, work experience, employment skills, etc. If these factors sound like what the court looks at in assessing alimony, you are right. A court also may order a division of property in a manner to avoid an award of alimony.
The Family Home and Child Custody
If one party wants to maintain the family home, or if the court wants to allow the parent who will have primary physical custody of the children to retain the home after the divorce, the court also considers this a factor in weighing how to distribute the parties’ assets and debts between them. The court may further examine the tax consequences of awarding certain property to one party or the other.
Prenuptial or Premarital Agreements
If the parties have a prenuptial or premarital agreement, the court examines it and will apply the terms unless it finds the agreement unenforceable. Post-nuptial agreements are not enforceable in Iowa; however, during a divorce action, the parties may agree on the division of certain assets before entry of the final decree (for example, if the marital home is sold and they agree to divide the proceeds so each can buy a new home without waiting for a final decree).
Debt
The division of property will also include the division of debt. The court divides the good and the bad between the parties, taking the parties’ affidavits of financial status into consideration. If one party does not have the ability to pay debts as easily as the other, a court may order one party to pay more of the debt. In reality, the court can consider any other economic circumstances or factors it determines are relevant in an individual case, such as whether a party has wasted or dissipated assets, or accumulated debts in a questionable manner.
The Role of a Family Law Attorney
What may be equitable in the court’s eyes may not be fair from the viewpoint of one (or both) of the parties. Our attorneys at CashattWarren Family Law work to put our clients in the best position to resolve the division of their property without a determination by the court. We know if an amicable resolution is impossible and are prepared to proceed to court to achieve a favorable result for our client. To work with us, schedule a consultation today by calling us at 515.421.9290.