When facing a divorce, you are likely worried about how you and your spouse will divide marital assets and debts. This concern is of high importance for individuals who own significant property, such as real estate holdings and investment accounts.
Prepare to file for divorce in Pennsylvania by understanding how the state handles property division.
Separate vs. marital property
Pennsylvania is an equitable division state, which means that the court will split marital property fairly, but not necessarily equally. Marital property includes all assets and debts that the couple amassed during the marriage except:
- Exempt veteran benefits
- Property either party donated, threw away or sold in good faith before the couple separated
- Property either party gained after the separation date but before the final divorce decree
- Inheritance or gifts only one spouse received during the marriage
- Property either party has designated as separate property in a prenuptial or postnuptial agreement
- Property either party acquired before the marriage
Your retirement assets may also be subject to division in a divorce. If so, the judge will create a qualified domestic relations order allowing a withdrawal and distribution from your investment account.
Factors in property division
Ideally, a divorcing couple will come to a consensus about how to share property during negotiation or mediation. Otherwise, the judge will determine equitable division based on these factors:
- Both spouses’ current and projected future financial circumstances, including income, health care and retirement benefits
- How long the marriage lasted
- The standard of living the couple enjoyed during the marriage
- Whether either person has one or more prior marriages
- How each spouse contributed to the marriage, including non-economic contributions such as child care
- Each person’s age and health status
- Whether either spouse made contributions to the other’s education or career
- Each person’s current and future employment prospects and earning capacity
- The possible tax consequences of property division
Creating a prenuptial or postnuptial agreement can preserve family heirlooms, business interests and other personal assets.