What Is Equitable Distribution in a Divorce?

In Texas, and in most other states, marital property isn’t evenly split between divorcing spouses. Such may be the case in the minority of states that recognize community property, but most of the U.S. abides by the equitable distribution of marital property.

To some, equitable distribution sounds like it should mean that property is equally split, but “equitable” is not a synonym for “equal.” Rather, equitable actually means “fair” or “reasonable.” Within the context of divorce, this means that marital property is split between spouses according to what the court determines is fair or reasonable, which is often unequal but not necessarily so.

Why Property May Be Unequally Divided

The court’s goal is to ensure that each spouse can maintain the standard of living they became accustomed to during marriage, but that requires weighing a variety of factors against each other.

Equitable distribution provides an unequal division of marital property in many cases. It’s more likely to occur when spouses aren’t on an even level when it comes to their education, vocational skills, and earning power. Often, the spouse who benefits most from the equitable distribution of property is the spouse with the least of these factors, but that may not always be the case.

Other factors the court will assess include the following:

  • Duration of the marriage
  • The standard of living established during marriage
  • Each spouse’s age
  • Each spouse’s physical and emotional
  • Each spouse’s separate property (both assets and debts)
  • Existence of any prenuptial or postnuptial agreements
  • Alimony awards

If Spouse A earns a greater income, has a lot more separate property, and/or has more marketable occupational skills, they may earn less than Spouse B, who does not. The court’s reasoning would be that Spouse B requires more of the marital property to maintain the standard of living established during marriage than Spouse A does.

If the marriage’s standard of living was affected by inheritances or gifts that Spouse B received from relatives, however, the court will take this into account. Depending upon all of the other factors that must be weighed, equitable distribution could tilt toward a more equal balance – or even in Spouse A’s favor.

What Is Considered Separate Property in an Equitable Distribution?

At the beginning of the equitable distribution process, the court will determine what property belongs to the marriage and what property is separate from the marriage. Property that is separate from the marriage, simply known as “separate property,” isn’t subject to division.

Generally speaking, property that someone owns prior to marriage, was acquired as a gift from a third party during marriage, or was received through inheritance. This property can be liquid or non-liquid, and specifically include things like securities, savings accounts, real estate, vehicles, and more.

Separate property must be kept separate from marital property in order to remain protected from equitable distribution. Income earned during marriage and placed into a separate savings account can transmute the whole account into marital property. Likewise, if securities are purchased for a separate brokerage portfolio using income earned during marriage, the entire brokerage account can transmute.

Sometimes it’s not a lost cause when separate and marital property comingle. Under certain circumstances, separate property can be identified and extracted from the whole for protection. This can be the case when deciding how to divide business interests when a company was started by one spouse before getting marriage.