Property Division (Part II)—What is “equitable distribution”?
Does equitable mean equal in Mississippi?
In a divorce, what is this “equitable distribution” scheme which Mississippi follows? In 1994, the Mississippi Supreme Court described it as:
The authority of the courts to award property legally owned by one spouse to the other spouse, and recognizes that a non-working spouse’s efforts contribute to the acquisition of the marital estate… Under the equitable distribution system, the marriage is viewed as a partnership with both spouses contributing to the marital estate in the manner which they have chosen.
Ferguson v. Ferguson, 639 So.2d 921 (Miss. 1994). Well, that is the justification for the system, but how does the chancellor divide the property?
The first step in the process is to classify property as either marital or non-marital (separate). Marital property is “any and all property acquired or accumulated during the course of the marriage.” Hemsley v. Hemsley, 639 So.2d 909, 915 (Miss. 1994). Any property acquired during marriage carries a presumption that it is marital property. A spouse objecting to this classification must prove otherwise. Common examples of non-martial, or separate property, are inheritances and gifts received by a spouse during the marriage.
The next step is to determine the fair market value of the property. Many times this will require the use of experts to give opinions as to the fair market value of the property.
The final step is for the chancellor to decide how to distribute the property equitably. Again, Mississippi Courts have adopted certain factors to be considered by the chancellor in making this determination. Known as the Ferguson factors, they are:
- Substantial contribution to the accumulation of the property. This includes direct and indirect economic contributions to the acquisition of the property; contribution to the stability and harmony of the marital and family relationships as measured by quality, quantity of time spent on family duties and duration of the marriage; and contribution to the education, training or other accomplishment bearing on the earning power of the spouse accumulating the assets;
- The degree to which each spouse has expended, withdrawn or otherwise disposed of marital assets and any prior distribution of such assets by agreement, decree or otherwise;
- The market value and the emotional value of the assets subject to distribution;
- The market value of each spouse’s separate property;
- Tax and other economic consequences, and contractual or legal consequences to third parties, of the proposed distribution;
- The extent to which property division can eliminate the need for alimony;
- The needs of each spouse’s financial security with due regard to the combination of assets, income and earning capacity; and
- Any other factor which in equity should be considered.
The chancellor will hear evidence on these points to make a determination.
Wait—what about alimony and child support? When the chancellor decides who gets what property, does he factor in the amount of child support I pay and whether I will have to pay alimony? It depends. According to the Mississippi Supreme Court,
“if there are sufficient marital assets which, when equitably divided and considered with each spouse’s non-marital assets, will adequately provide for both parties, no more need be done. If the situation is such that an equitable division of marital property, considered with each party’s non-marital assets, leaves a deficit for one party, then alimony based on the value of the non-marital assets should be considered."
Lauro v. Lauro. However, the Mississippi Supreme Court has stated that “all property division, lump sum or periodic alimony payment, and mutual obligations for child support should be considered together. Alimony and equitable distribution are distinct concepts, but together they command the entire field of financial settlement of divorce. Therefore, where one expands, the other must recede.” Lauro at 848-849. What does this mean? It means that after dividing the marital estate and considering the separate property of each spouse, the chancellor decides if the division is equitable. If it is not, then the chancellor should consider whether alimony should be awarded to one of the spouses to make up for the inequity.
In my next post, I will talk about alimony in Mississippi, the different forms, and what factors are considered to determine whether it should be awarded.
