When it comes to dividing property in a divorce, there are two methods of distribution: equitable distribution and community property. Only a small handful of states, including California and Nevada, are community property states. The rest of them, including Pennsylvania, use the equitable distribution model.
Under community property law, spouses have a 50 percent interest in all marital property and marital debt, regardless of who earned the money, whose name is on the title, or which spouse incurred a debt. Under the equitable distribution model, the property is divided in a fair and equitable fashion, which does not necessarily mean “equal.”
Separate vs. Marital Property
In Pennsylvania divorces, only marital property or assets are divided. Separate property remains separate under most circumstances. Some examples of separate property include:
- Assets acquired before the marriage
- Inheritances and gifts received during the marriage
- Property that has been excluded from the marital estate due to an ironclad prenuptial or postnuptial agreement
- Property the spouses acquired after the separation
- Certain veterans’ benefits
- Personal injury awards received after the couple separated
If you notice, #2 lists inheritances and gifts received during a marriage as “separate property,” however, that is not the case with gifts exchanged between spouses. If a gift was given from one spouse to another during the marriage, it would NOT be separate property. Instead, it would be considered “marital property” and therefore it would be subject to division in the divorce.
For example, suppose a husband bought his wife an expensive horse for her birthday. Even though he gave her the horse, and even though it was an animal, it would still be considered “marital property” in the divorce. The same would go for a car, a boat, artwork, or anything else of value. As long as it was a gift between spouses, it would be marital property.