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Property & Equalization
Property equalization is a term used in family law to describe the process of dividing marital property fairly between spouses in the event of a divorce or separation. It’s based on the principle that marriage is a partnership, and each spouse has contributed to the accumulation of assets and debts during the course of the relationship. Therefore, both spouses should have an equal share of the marital property, regardless of whose name the property is in.
Marital property includes any assets that were acquired during the marriage, including real estate, investments, pensions, and personal property like cars, furniture, and jewelry. Debts incurred during the marriage, such as mortgages, credit card balances, and loans, are also considered marital property.
The process of property equalization typically involves the following steps:
1 – Identifying all marital property: Both spouses must disclose all assets and debts that they own, either separately or jointly.
2 – Valuing marital property: The value of each asset and debt must be determined as of the date of separation or divorce.
3 – Determining net worth: The total value of all marital property is subtracted from the total amount of marital debt to arrive at the couple’s net worth.
4 – Dividing net worth: The net worth is then divided equally between the spouses.
In some cases, there may be disagreements over the value of certain assets or debts, or over which assets should be considered marital property. If the couple can’t agree on these issues, a court may need to intervene to make a determination.
It’s worth noting that property equalization only applies to marital property, not separate property. Separate property includes any assets that were owned by one spouse before the marriage, as well as any gifts or inheritances received during the marriage that were kept separate from marital property. Separate property is not subject to division in a divorce or separation.
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