In a vehement slap in the face to men and their finances, divorce courts follow a completely flawed decision process in their approach to marital property division. Based on the way the courts treat property, recommending men stand by for unfair treatment is considered solid, traditional divorce advice for men.
Marital property affected by this includes:
- Cars, Boats, RVs
- Savings Accounts
- Investment Accounts
- Individual Retirement Accounts (IRAs)
- Military Pensions
- Business Interests
- And a host of other things with monetary value
How property is divided depends on your state. It also sometimes further depends on your region in your state. At the most basic level, states either follow community property or equitable distribution guidelines.
Today only nine states follow community property law. Alaska is potentially the tenth state to follow community property law, whereby their law requires both parties to agree to a community property doctrine.
Under these rules, all property acquired during the marriage is marital property and is divided equally at divorce.
These states are primarily in the west and trace their history of community property law to Spanish law. It’s ridiculous that these states are so vastly different from the rest of the country and only because their laws are based on the rights of previous colonial owners.
In contrast, the remaining states in the country divide property following the principles of equitable distribution. Property acquired after marriage is divided equitably, not necessarily equally. Sounds reasonable, right? The reality is, though, that equitable nearly always turns out to be equal. In most divorces across the country, courts simply add up assets and split them down the middle. Little to no effort is made to determine a value to guide a fair, equitable distribution. Chances are your attorney will advise you to just accept half and move on.
Most people are not alarmed in their initial reaction to equal division of marital property. After all, the property was acquired while married. Both parties contributed to the family, either through time or money, so equal is likely, right?
Charitable organizations often use this standard when considering incoming monetary donations, time offered, talents and services rendered, or treasures given. You can donate any or all of those categories, and it is considered giving.
Perhaps, this system of assessing value (or a similar one) is used as a rubric by the courts in making an asset-splitting decision. Dare they not delve deeper into the guidelines of equitable division?
Not all contributions to a marriage are equal. The courts look at time spent with children and other activities to determine custody. What prevents them from taking an alternative, more reasonable, view of marital contributions when deciding property division?
The Value Contribution Method
Marriage is very similar to a business partnership. In business terms, a partnership is very easy to define. When business partnerships dissolve, the division of assets is NOT a rubber stamp, 50% division. Instead, each individual’s contribution and shares of ownership determine where the proverbial cleaver should land. Marriage should be viewed the same way.
On one’s wedding day, the property line was drawn. From that point forward, each party contributed value to the marriage and earned associated “shares” in the marital partnership.
Everything each spouse contributed has value and not just through a paycheck. Staying at home to care for the household and children has value. It’s not difficult to associate a dollar amount to this value.
Courts could look through the history of the marriage and assign value to each party’s contributions. Then, they could determine the number of shares each partner earned in the marriage prior to separation.
The cost of childcare for a minimum wage earning household, as an example, is not the correct value to associate with a stay-at-home parent in a physician’s home. Their income and standard of living should assign an associated increase in assumed value for childcare and home care.
By looking through the history of the marriage and assigning value to each person’s contributions, courts could very easily determine the number of “shares” each partner earned before the divorce.
Courts could publish guidelines considering local rates and percentages based on household income. They’d vary based on the district and local economic factors.
This value can easily be determined by comparison of:
- Local childcare
- House care
- And other services in the area
With lawyers and their opinions out of the picture, these guidelines would set the tone for the proceedings.
In instances where the differences in income are extreme, adding a percentage based on a standard of living may still result in a large disparity in share distribution. While the math may be true, there is some value in the initial creation of the partnership.
Courts could, in these cases, consider each partner to own some percentage of share, say 20% each, at the start of the marriage. The value contribution method could be used to divide the remaining 60% of the partnership.
A Property Dividing Example Using This Method
To help illustrate this method, let’s use a fictional example. Values are notional and provided only to help illustrate the approach.
Consider a household in which the husband earns $200,000 per year and the wife earns $50,000. His job may require long hours, so the wife assumes all of the household duties as well as childcare for their children.
In their region, childcare and home care services average $20,000 per year. Due to their 25% higher than average household income for the region, the associated child, and home care value is increased to $50,000 based on their standard of living.
Each share of their hypothetical partnership is worth $1,000. The husband earns 200 annual shares from employment. The wife earns 50 shares from her job and 50 shares from the value she contributes in child and home care, totally 100 shares.
At the time of the divorce, he has double the shares of his wife, so he should receive double the property. The division would be 66% to the husband and 33% to the wife respectively.
The courts may have a guideline for no-fault marriages preventing either spouse from receiving less than 35% in order to prevent an extreme disparity in distribution. Under those guidelines, the wife would receive 35% and the husband 65%.
The example is not intended to be sexist. The data in America today shows a difference in salaries between husbands and wives that corresponds with the associated range in time use as well. The goal is not to leave one partner impoverished, a result that could easily be corrected by setting a minimum division percentage. But it does allow courts within states to apply the data readily available in their geographic region to each individual case to produce property divisions in divorces under equitable distribution jurisdictions that are fair, logical, backed up with solid data, but not necessarily equal.
Many states already use a data-driven system for alimony and child support. Maryland, for example, has an extensive calculator for both that pulls from many databases. Their approach is far better than other states that simply apply a fixed percentage based on income alone.
The problems in our family court system today are numerous. Fathers are penalized, in final decisions, by the time they spent at work in their past providing for their families.
A value-share approach is fair and reasonable when determining property division. Its division can be purely and simply numerically based and follow the example set in business partnership breakups. It requires up-front work in the establishment of guidelines, but the data is available. And the problem is not difficult to overcome.
The result will be a better, more rational, and a more logical division of property under equitable distribution standards instead of the generic 50-50 split that rules our flawed family court system today.
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