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  1. #1
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    Aug 2018
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    Default How Does Equitable Distribution Work with Prior Assets in a Second Marriage

    My question involves a marriage in the state of: Pennsylvania

    If two people get married, both bring assets into a second marriage. If one has, for example, a house co-owned with his/her previous spouse and that gets sold during the second marriage, it's considered a previous asset, correct?

    So then if the second marriage turns to divorce in an equitable distribution state like PA, DE, NJ, how is that done, for example, if the return from that previous sold home is in a joint account with the second spouse?

    To do the equitable distribution, is it essentially doing a calculation of each spouse's prior assets (or net worth factoring in any debt?) and then the current net worth, then providing each spouse with an equal amount they came into the marriage with and dividing any net worth growth in half and splitting that? And it's up to the couple (or courts if they can't agree) on how to divide or sell off assets to make that happen?

    I was told at one point that in the prior example, if the previous assets (such as this prior home example) are sold and put in a joint account, they're "comingled" and now belong to both in a divorce proceeding.

    Thanks for any help, quite confused about how the process works and curious (not for my wife and I who aren't considering divorce...)

  2. #2
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    Default Re: How Does Equitable Distribution Work with Prior Assets in a Second Marriage

    Quote Quoting Diver4242
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    If two people get married, both bring assets into a second marriage. If one has, for example, a house co-owned with his/her previous spouse and that gets sold during the second marriage, it's considered a previous asset, correct?
    The term "previous asset" has no legal meaning. It's also not clear what "it" refers to, but I'll assume you're talking about the proceeds of the sale of the house. At the time of the sale, the proceeds of the sale of an asset owned before the marriage are non-marital property. Whether those proceeds remain non-marital property depends on what the spouse receiving the proceeds does with them.


    Quote Quoting Diver4242
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    To do the equitable distribution, is it essentially doing a calculation of each spouse's prior assets (or net worth factoring in any debt?) and then the current net worth, then providing each spouse with an equal amount they came into the marriage with and dividing any net worth growth in half and splitting that? And it's up to the couple (or courts if they can't agree) on how to divide or sell off assets to make that happen?
    I don't really follow the first of these two questions, but yes, if the two spouses can agree on a division of assets, the court will likely sign off on it. However, if they cannot agree, then the court's first task is to ascertain whether any given asset in the possession of either spouse is marital or non-marital property or of mixed character. Non-marital property is generally not subject to division. Marital property is divided in a manner that the court determines to be equitable (i.e., fair) based on numerous factors.


    Quote Quoting Diver4242
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    I was told at one point that in the prior example, if the previous assets (such as this prior home example) are sold and put in a joint account, they're "comingled" and now belong to both in a divorce proceeding.
    Commingling marital and non-marital property (especially something fungible like cash) can indeed result in the non-marital property being converted into marital property.

  3. #3
    Join Date
    Oct 2006
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    Default Re: How Does Equitable Distribution Work with Prior Assets in a Second Marriage

    Quote Quoting Diver4242
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    My question involves a marriage in the state of: Pennsylvania

    If two people get married, both bring assets into a second marriage. If one has, for example, a house co-owned with his/her previous spouse and that gets sold during the second marriage, it's considered a previous asset, correct?

    Yes, as long as the assets have not been comingled.

    So then if the second marriage turns to divorce in an equitable distribution state like PA, DE, NJ, how is that done, for example, if the return from that previous sold home is in a joint account with the second spouse?
    That would be a problem since putting it in a joint account with the second spouse is comingling assets. How can you determine what money was spent from that joint account? The marital part or the prior part?

    To do the equitable distribution, is it essentially doing a calculation of each spouse's prior assets (or net worth factoring in any debt?) and then the current net worth, then providing each spouse with an equal amount they came into the marriage with and dividing any net worth growth in half and splitting that? And it's up to the couple (or courts if they can't agree) on how to divide or sell off assets to make that happen?
    Assets that accrued during the marriage are what normally is divided...and yes, you might have to sell some assets that have both prior and marital equity in order to do that.

    I was told at one point that in the prior example, if the previous assets (such as this prior home example) are sold and put in a joint account, they're "comingled" and now belong to both in a divorce proceeding.

    Yes, although sometimes its possible to break out the prior asset. For example, if the money went into a joint savings account and you never spent any money out of that savings account, then it might be possible to break it out.

    Thanks for any help, quite confused about how the process works and curious (not for my wife and I who aren't considering divorce...)

    Why are you asking if you are not considering divorce?

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