Poconos High-Asset Divorce: Navigating Section 3502 Equitable Distribution in Monroe County

Under 23 Pa.C.S. § 3502, a court dividing marital property in a Monroe County divorce does so based on what is “equitable” under the circumstances of the marriage and the divorce. This does not necessarily mean a 50/50 split. At CSMJ Law, we focus on protecting our clients’ assets during the divorce process, including inheritances and other non-marital property, and on how the § 3502(a) factors apply to the division of the marital estate.

If you are preparing to go through a divorce in Monroe County, dividing your marital assets will be a key part of the process. If either spouse asks the court to divide marital property, and no valid prenuptial, postnuptial or other agreement controls, the court will divide your marital assets under 23 Pa.C.S. § 3502.

This is Pennsylvania’s “equitable distribution” law. Under 23 Pa.C.S. § 3502, the Monroe County courts are required to divide divorcing spouses’ marital assets, “equitably . . . without regard to marital misconduct in such percentages and in such manner as the court deems just after considering all relevant factors.” This means that while a 50/50 split might be warranted, it also might not. Spouses who settle their property claims by agreement are not required to reproduce that result, but § 3502 is the standard a court would apply if they could not agree, so it is the backdrop for those negotiations.

Understanding Pennsylvania’s “Equitable Distribution” Factors

Along with establishing Pennsylvania’s “equitable distribution” rule, 23 Pa.C.S. § 3502(a) lists the factors a court weighs in deciding what is equitable in a particular set of circumstances. The court considers all relevant factors, including the following (summarized from the statute):

• The length of the marriage
• Any prior marriage of either spouse
• Each spouse’s age, health, station, amount and sources of income, vocational skills, employability, estate, liabilities and needs
• Any contribution by one spouse to the other’s education, training or increased earning power
• Each spouse’s opportunity for “future acquisitions of capital assets and income”
• The sources of income of both spouses, including medical, retirement, insurance or other benefits
• Each spouse’s contribution to, or dissipation of, the acquisition, preservation, depreciation or appreciation of the marital property, including contribution as a homemaker
• The value of the property set apart to each spouse
• The standard of living the spouses established during the marriage
• Each spouse’s economic circumstances at the time the division of property is to take effect
• The federal, state, and local tax consequences associated with each asset to be divided
• The expense of selling, transferring or liquidating a particular asset
• Whether a spouse will be serving as the custodian of any dependent minor children

As you can see, Pennsylvania’s “equitable distribution” factors cover a wide range of considerations. This is by design. The division of a couple’s marital assets during their divorce can impact both spouses’ lives for years (if not decades) to come, so it is critical to ensure that the process is as fair and comprehensive as possible.

While it is important to consider all of the § 3502(a) factors during the divorce process, it is also important to note that not all factors will be relevant in all scenarios. Additionally, depending on a couple’s individual circumstances, certain factors may need to be given more weight than others. Ultimately, like all aspects of the divorce process, a custom-tailored approach is key, and divorcing spouses should work with their attorneys to ensure that they are making informed and confident decisions focused on the future.

Protecting Non-Marital Assets in a Stroudsburg, PA Divorce

Pennsylvania’s “equitable distribution” rule applies to divorcing spouses’ marital assets. Either spouse may also have non-marital assets, and those assets themselves are not subject to distribution during the divorce process, although an increase in their value during the marriage can be (see below).

Instead, as a general rule, both spouses are entitled to keep their non-marital assets after their divorce. Under 23 Pa.C.S. § 3501, non-marital assets include, among others:

• Assets owned before the couple’s marriage
• Assets acquired in exchange for assets owned prior to the couple’s marriage
• Assets acquired by gift from third parties
• Assets acquired by inheritance
• Assets acquired after final separation and before the divorce, except assets acquired in exchange for marital assets
• Veterans’ benefits that are exempt from attachment, except benefits received where the veteran waived part of military retirement pay to receive veterans’ compensation
• Awards or settlements for claims that accrued before the marriage or after the date of final separation, whenever the payment is received
• Property excluded by a valid agreement between the spouses

Note that we said the general rule is that non-marital assets are not subject to distribution during the divorce process. Two qualifications matter. First, under 23 Pa.C.S. § 3501(a) and (a.1), any increase during the marriage in the value of property owned before the marriage, or received by gift or inheritance, is itself marital property. It is measured from the date of marriage (or the later date the property was acquired) to either the date of final separation or a date as close to the equitable-distribution hearing as possible, whichever produces the smaller increase, and a decrease in the value of one spouse’s non-marital property offsets an increase in that same spouse’s non-marital property. Second, property acquired during the marriage is presumed marital however it is titled, so the spouse claiming an exclusion has to prove it; if non-marital and marital funds have been commingled, a non-marital claim generally survives only to the extent the funds can be traced.

Business Valuation in Poconos Divorces

For spouses who are business owners (or whose spouses are business owners), the business can be a key part of the divorce process as well. A threshold question is classification: if a spouse owned the business before the marriage or received it by gift or inheritance, generally only its increase in value during the marriage, measured under § 3501(a.1), is marital. Where the value is disputed, the spouses may need to agree on, or the court may need to choose between, competing valuation methods.

In many cases, a privately held business will be among the most valuable assets involved in a couple’s divorce, and its value can drive the overall distribution, so the valuation method and the evidence behind it deserve careful attention.

Monroe County Local Court Rules that Apply to Divorce Proceedings

As a final note, a Pennsylvania divorce is a court action that ends with a decree. Its procedure is governed by the statewide Pennsylvania Rules of Civil Procedure, supplemented by the Monroe County local rules of court. Many couples resolve their property claims by agreement without a contested equitable-distribution hearing, but the filing requirements and deadlines still apply, and missing one could lead to unnecessary delays or complications. In addition to helping you work to resolve your divorce out of court, an experienced Monroe County divorce lawyer will be able to help you navigate the court process if necessary.

At our firm, partner Gary J. Saylor, II, focuses his practice on family law, including divorce, and handles these matters as part of the firm through his own family-law practice. His site covers contested and uncontested divorce and the division of marital property in more detail: Gary J. Saylor, II, divorce lawyer in Stroudsburg, PA.

Speak with a Monroe County Divorce Lawyer at CSMJ Law in Confidence

Do you have questions about protecting your marital or non-marital assets during the divorce process? If so, we invite you to get in touch. To speak with an experienced Monroe County divorce lawyer at CSMJ in confidence, please call 570-421-5568 or request an appointment online today.

This article is general legal information, not legal advice, and does not create an attorney-client relationship. Pennsylvania law changes and every case turns on its specific facts. Consult a licensed Pennsylvania attorney about your situation.