Should assets be split evenly in divorce?
- As of 2022, nine US states observe community property law, where marital assets are split 50-50. They are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
- Most states utilize equitable distribution, which is defined as 'the distribution of marital assets by a court in a divorce action in accordance with statutory guidelines that are designed to produce a fair but not necessarily equal division of the property.'
- The most expensive state to divorce in is California, where the average cost in 2021 is $14,435.
- The national divorce rate, as reported by the United States Census Bureau, was 7.6 in 2019. The top three states with the highest divorce rate were Arkansas, Oklahoma, and Nevada. The three states with the lowest divorce rate were Maine, the District of Columbia (DC), and South Dakota.
- The top three reasons for divorce cited by the Certified Divorce Financial Analysts within the last 10 years are incompatibility (43%), infidelity (28%), and money issues (22%).
- Professionals advocate that one establishes their own financial identity when getting divorced, including “opening your own bank account, if you don't already have one” as a first and critical step.
Splitting assets 50/50 is not fair to a couple getting divorced as it is necessary to consider the division of labor between both partners, as they have held varied responsibilities and have likely brought unequal assets into the marriage in the beginning.
Each person may have accomplished different things in the marriage, such as the quality of work (child care versus office work), which requires a different work ethic. These differences should result in a different payout. Likewise, the amount of time a person put into their respective work and duties in the partnership, no matter what it was, should be considered. For example, a stay-at-home mom who cooked dinner and cleaned the house—enacting the pay-worthy duties of a nanny, personal chef, and house cleaner—would still be entitled to some payout for her contributions to the household.
Additionally, the amount of money each individual contributed to the union should also be considered, something often discounted in 50/50 splits. If one spouse earned $95,000 yearly and the other $15,000, the court would be right to favor the lower-earning spouse, who needs financial support moving forward. The lopsided earning and financial contributions between both spouses were acceptable during the relationship and shouldn't change just because of the divorce. Things like special circumstances, such as whether or not a spouse is living with a disability, are also important factors.
Moreover, spousal or child support and perhaps many other substantial legal obligations, such as alimony, may still be required in a 50/50 divorce, which makes a settlement like this even more unfair. Marriages, like people, are unique and thus require their own unique dissolution solutions than across-the-board 50/50 divisions.
For marital assets to be split equitably, they need to be split equally. While this may not be the general rule, it's about time it becomes one. Firstly, marriage is a legal and financial partnership. Married couples make joint decisions that impact their finances and money management. Courts in states such as California acknowledge this, which is why they consider all property and debts acquired during a marriage to belong to both partners. And as a result, they tend to be divided equally.
Divorce courts also factor in how both parts of the couple have contributed to the success of a marriage—even if only one of them is earning a paycheck, which is the case with most men who are in the top 1% of earners. Family courts in California, for example, consider the value of household services contributed by a spouse. They deem that the unpaid labor put into household chores or raising children financially impacts the household. Similarly, receiving an equal share will support spouses who gave up working or worked fewer hours during the marriage. This amount is considered lost potential wages since they could have been earning had they not had marital responsibilities.
A fair share of marital assets can also support spouses who gain custody of the children. According to the Office of Child Support Enforcement (OCSE), at least $10 billion in child support is uncollected. As issuing an order of child support doesn't guarantee payment, the extra sum will help.
So, for the sake of everyone involved, couples should be treated as equals at the end of the marriage. Just like they did during it.