Property Division
Pennsylvania is an equitable distribution state, meaning the courts look to distribute property in a way that is most fair for the situation, which may not necessarily be equal.
Court Divided Property
The court distributes marital assets to the parties. Marital assets are all assets acquired from the date of marriage until either the date of filing for divorce, the date of separation or the date of distribution. This includes the appreciation of assets such as a house.
Equitable Distribution
Equitable distribution is the determination of how marital assets will be distributed between two parties in a divorce. Pennsylvania is an equitable distribution state, meaning the courts look to distribute property in a way that is most fair for the situation, which may not necessarily be equal.
The court distributes marital assets to the parties. Marital assets are all assets acquired from the date of marriage until either the date of filing for divorce, the date of separation or the date of distribution. This includes the appreciation of assets such as a house.
It is possible for a non-marital asset to become a marital asset
by putting your house into your spouse’s name at the time of marriage.
The process of determining equitable distribution involves three distinct steps
Discovery
The court classifies the assets to determine which are marital property and which are not.
Assigning Value
Once classified, the court assigns a monetary value to each asset.
Distribution
The court distributes the assets to each party. Because Pennsylvania is an equitable distribution state, the court looks to distribute the assets fairly, not necessarily equally.
Business Valuation
Business valuation is a complex component of equitable distribution. Our law firm is skilled at identifying separate property, assisting our clients in protecting separate property, determining the value of a spouse’s participation in the business and assessing the value added to the business during the marriage.
Assigning Monetary Value to a Business
Marital property includes assets and property that were acquired during the marriage, including business assets, business profits and business interests. We work with business valuation experts, accountants and financial planners to evaluate and quantify the value of various elements in the business.
Important Elements of Valuation
- Tax information
- Financial statements
- Balance sheets
- Reports
- Equipment lists
- Real estate
- Intellectual property
- Inventory
- Patient lists
- Practice demographics
Retirement Funds
Retirement funds and assets earned during a marriage are also marital property. While retirement may still be in the distant future, it is important to account for all marital property in your divorce.
What is a QDRO?
A qualified domestic relations order (QDRO) is prepared to distribute funds from a retirement account, such as an annuity, in the future. QDROs are only necessary in certain situations and require careful preparation by a detail-oriented attorney. The Law Offices of Marguerite Nealon can help you determine if you need a QDRO for the division of your or your spouse’s retirement accounts.
Equitable distribution will affect retirement funds, including:
- Pensions
- Annuities
- 401(k)s
- Individual retirement accounts (IRAs)
- TIAA-CREF academic/teaching pensions
- Civil Service Retirement System (CSRS) or federal government retirement plans
- Pennsylvania State Employee Retirement Services (SERS) fund pensions
Financial Assets, Investments & Compensation
More and more companies are using stock options and offering restricted shares of stock as forms of compensation to their employees. If you are getting a divorce, you need an attorney who can help you understand how these complex investments and compensation packages will be divided in your divorce.
Are Stock Options and Restricted Shares of Stock Marital Property?
Any assets, or debts, accumulated during your marriage are marital property and subject to equitable distribution.
This can include a wide range of financial assets, investments and compensation in addition to salary, such as:
- Vested or unvested shares of stock
- Restricted shares of stock
- Stock options
- Employee bonuses
- Annuities and 401(k) plans
With stock options, the option itself is marital property, not the stocks purchased under the option. When dividing a stock option, the nonemployee spouse can choose to wait for his or her share when the option is exercised. Otherwise, the spouse could speculate on the potential value of the option and accept payment at the time of the divorce.