Understanding Marital Assets and Debts in Divorce

marital assets and debts

In the commonwealth of Pennsylvania, divorce courts apply what is known as the equitable division standard when it comes to addressing the distribution of marital assets and debts in divorce proceedings. Oftentimes a party to a divorce case has a certain level of confusion regarding the issue of marital assets and debts in divorce proceedings. It is crucial that a person have an essential understanding of how and why a divorce court addresses marital assets and debts in divorce proceedings.

Defining Marital Assets and Debts

Marital assets and debts are classified as property and financial liabilities acquired or accumulated by a couple during the term of a marriage. These assets and debts are what a court must divide between a divorcing couple during marriage dissolution proceedings.

What Marital Assets and Debts Are Not

Certain types of property and financial liabilities are not considered marital assets and debts for the purposes of distribution in divorce proceedings. The most common types of marital assets and debts are property and financial obligations acquired or accumulated by one or another of the spouses prior to the commencement of the marriage.

As a general rule, this individual property and debt is not subject to division in divorce proceedings. In simple terms, what a party brings into the marriage in the way of assets and debts leaves with that individual if the marriage comes to an end.

Inheritance and Gifts

Inheritance receive by and gifts specifically given to one spouse typically are classified as non-marital assets. There can be exceptions to this rule on a case by case basis. Nonetheless, this is the general rule when it comes to gifts and inheritance received by one of the spouses during the term of a marriage.

Prenuptial Agreement

A prenuptial agreement can define the manner in which marital assets and debts are dealt with in the event of a divorce. If enforceable and not successfully challenged by a spouse during a divorce, a prenuptial agreement will control the manner in which assets and debts of the marriage are distributed.

Agreement of the Parties

A Pennsylvania court is vested with the power to divide assets and debts using the equitable division standard. Nonetheless, the parties can reach an agreement regarding asset and debt division and distribution, an agreement which must be approved by the court.