There are two general legal theories used in the United States for dividing marital possessions at divorce. The community property method is used in Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington, and Wisconsin—and also in Alaska, if the spouses agree in writing. The equitable distribution method is used in the other states.
The basic concept of the community property theory is that all of the property the spouses own is divided equally. The concept of the equitable distribution theory is that the couple’s property is divided equitably, which means fairly. At first glance, you might think there is a big difference between the two concepts. However, in application, they are not that different.
A careful look at the laws of the community property states reveals that only three of them—California, Louisiana, and New Mexico— stick stubbornly to the requirement of an equal division. The other community property states insist on an equal division “unless it would be inequitable to do so.” And the decision of whether it would be inequitable is left up to the judge who tries the case.
In equitable distribution states, a judge almost always starts with an assumption that the property will be divided equally, but may depart from that if either you or your lawyer make a convincing argument it would be inequitable or unfair not to do so.
The bottom line: A divorcing couple’s property will always be divided equally in California, Louisiana, and New Mexico. And it normally will be divided equally in other states, but may be divided differently if a judge decides fairness requires it.
In dealing with property acquired during a marriage, it doesn’t matter which spouse earned the money in the bank accounts. If it was earned during the marriage, it belongs to the parties jointly. So, for example, if a corporation president gets a $1 million bonus during a marriage and deposits it in a bank account in his or her name alone, the other spouse will normally get half of what is left of the bonus when the couple separates and divorces. In equitable distribution states, this property is called “marital property.” In community property states, it is called “community property.”
In the attempt to avoid the perceived unfairness of an equal split of property where one spouse has outdone the other in giving to or taking from the marriage, the legislatures of most states have created a long list of factors that may be considered when making the division.
These factors give the judges some “Wiggle Room” in avoiding an equal division where they feel it would be inappropriate. Some states end their list of factors by adding a catch-all wiggle—that is, in addition to the list of factors, the property need not be divided equally “where it would be inequitable or inappropriate to do so given the circumstances of the case.”
New York law puts it this way: “The court shall consider… any other factor which [it] shall expressly find to be just and proper. In any action in which the court shall determine that an equitable distribution is appropriate but would be impractical or burdensome…, the court in lieu of such equitable distribution shall make a distributive award in order to achieve equity between the parties.” That’s a lot of wiggle. Judges don’t use it often, but it may be something you want to lobby for in your case.
If you have hired an experienced lawyer to help with your divorce, he or she should be able to quickly recite any Wiggle Room factors in your state and let you know how often the local judges depart from equality.
Most mediators will be able to do the same thing. You can also get a quick summary of the controlling law in your state by going to https://www.divorcenet.com/topics/property and scrolling down to the list of states.