Pennsylvania is an equitable distribution state — not a community property state. "Equitable" means fair, not necessarily equal. The court divides marital property based on a list of factors set forth in 23 Pa.C.S. § 3502.
Marital property: All property acquired by either spouse during the marriage, regardless of whose name it's in. Also includes the increase in value of non-marital property during the marriage (if the increase is due to the efforts of either spouse or marital funds).
Non-marital property: Property acquired before the marriage, property acquired by gift or inheritance (and kept separate), and property excluded by a valid prenuptial agreement. Veteran's benefits are also non-marital.
The court considers: length of the marriage, prior marriages, age, health, income, earning capacity, contributions as homemaker, standard of living during the marriage, economic circumstances at the time of division, whether one party contributed to the other's education or training, sources of income (including retirement benefits), tax ramifications, and any other relevant factors. No single factor is determinative.
The marital home: Often the largest and most emotionally charged asset. Options include: one spouse buys out the other, sell and split proceeds, or deferred sale (uncommon, usually only where minor children's interests require it).
Retirement accounts: Pensions, 401(k)s, IRAs — the marital portion is subject to division. A Qualified Domestic Relations Order (QDRO) is typically required to divide employer-sponsored retirement plans without triggering early withdrawal penalties or taxes.
Business interests: If either spouse owns a business, the marital portion of its value is subject to division. Business valuation can be the most expensive and contested part of the divorce.
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