Equitable Distributions

Course: Investment Planning
Lesson 9: Fixed Income Securities

Student Question:

This page explains how the basis for inherited property is affected for common-law states and community property states. How is it affected for equitable distribution states like Florida?

Instructor Response:

Only marital property is subject to equitable distribution in most common law property states. The purpose of an equitable distribution is to determine whether marital property should be divided on a basis other than a 50/50 split. Unless the fact pattern on a question indicates otherwise, assume a 50/50 distribution in a common law property state, e.g., property owned as tenants by the entirety or jointly titled property.  

Property owned solely by an individual spouse in a common law property state is generally treated as “separate” property and is generally not subject to equitable distribution. While the CFP Board can test to any depth they wish on any particular exam, we’ve had no feedback that equitable distributions have been tested.