Divorcing couples may agree on how to divide their marital property themselves. In Pennsylvania, spouses can enter into a “property settlement agreement” (PSA) that memorializes their agreed-upon terms. Couples then submit their PSA to the court, so it can be incorporated into their final divorce decree.

If spouses can’t agree, they’ll end up in court, where a judge will decide. If spouses have a valid prenuptial agreement that addresses the division of property in the event of divorce, courts will follow the terms of the prenuptial agreement.

If there is marital property not covered by the prenuptial agreement, or if there is no valid prenuptial agreement, the court will divide marital property by “equitable distribution.” This means the court will order a division it believes is equitable or fair to both parties but not necessarily equal.

Pennsylvania courts consider several factors when determining equitable distribution, including:

• The length of the marriage;
• Whether either spouse has been married previously;
• Each spouse’s age, health, education, amount of income, and sources of income including disability, retirement, insurance or other benefits;
• Each spouse’s vocational skills and ability to be employed;
• The assets, debts, and needs of each spouse;
• Any contributions by one spouse to the other’s education, training, or earning ability. For example, if one spouse provided financial support or cared for the couple’s children so the other spouse could obtain an education;
• The future ability of each spouse to earn income and obtain assets;
• Each spouse’s contribution to the acquisition of marital assets or to preserving or increasing the value of marital assets (including contributions as a homemaker);
• Any reduction in the value of marital assets caused by either spouse;
• The amount or value of non-marital assets owned by each spouse;
• The standard of living the couple enjoyed during the marriage;
• The financial impact any proposed property division will have on each spouse such as the tax implications, and the expense of sale/transfer/liquidation of property; and
• Whether either spouse will be the custodian of any dependent children under the age of 18.

In Pennsylvania, courts do not consider marital misconduct, such as adultery, when dividing property, unless the misconduct had a financial impact on marital property. For example, if one spouse emptied a marital bank account buying gifts for a lover during the marriage and without the other spouse’s consent, a court may reduce the percentage the “offending” spouse gets from the marital estate to compensate for the unauthorized spending.

Debts must be divided in divorce as well. You’ll need to identify, characterize, and value all debts. Be sure to make a list, and consider all credit card debts, loans, mortgages, promissory notes, and liens.

Debts are characterized and valued similar to assets, but there are some differences. Debts incurred during marriage are generally considered marital debts, unless a spouse can show that it’s reasonable to assign the debt exclusively to the other spouse.

Debts incurred before marriage are generally “separate” and assigned to the spouse who incurred them, unless the couple jointly incurred the debt before marriage. In addition, if a debt was incurred before marriage for a marital purpose e.g., loan for wedding costs, there is a chance a court would characterize it as marital. Thus, the balance of premarital debts is generally irrelevant, except to show the amount of indebtedness one spouse has. Debts incurred after separation are treated in the same manner.

If you have any questions about Pennsylvania marital property or debts call Gregory J. Spadea at 610-521-0604 of the Law Offices of Spadea & Associates, LLC.