What Are Distributive Awards in Ohio Divorces?
Dividing property in a divorce — which is formally known as equitable distribution — generally applies only to marital property, which means assets acquired by either spouse during the marriage. However, there are circumstances when an Ohio court may order transfer of separately owned property from one spouse to the other. This is called a distributive award.
Under Ohio law, a distributive award is a court-ordered lump sum payment or series of installment payments sourced from the paying spouse’s separate property. Separate property means assets a spouse owned before the marriage and gifts or inheritances a spouse received while married. Normally, separate property is not divided in divorce. A distributive award is an exception to this rule. Importantly, a distributive award is distinct from any spousal support to which the other spouse may be entitled.
Distributive awards are sometimes used to simplify property division. For example, if the marital estate includes an asset — such as the family home — that either spouse does not want to liquidate, the court could allow one spouse to retain the property and to reimburse the other spouse for his or her ownership share. This can be an alternative to forcing a sale. The court also may make a distributive award in lieu of equitable distribution if a division of marital property in kind or in money would be impractical or burdensome.
Courts can also use distributive awards in situations where a spouse has engaged in financial misconduct, such as:
- Attempting to hide assets to prevent them from being divided in the divorce
- Wastefully dissipating assets prior to the divorce
- Fraudulently transferring assets to others before the divorce
When financial misconduct is involved, a court can compensate the offended spouse with a distributive award or with a greater award of marital property, worth up to three times the value of the property that the other spouse attempted to hide.
When a distributive award is found to be warranted, the court must analyze multiple factors to determine the amount. These include the length of the marriage, each spouse’s financial position, the liquidity or illiquidity of the assets, tax consequences and the economic desirability of keeping certain assets intact.
Whether you believe your spouse is hiding assets in your divorce or you are accused of doing so, reach out to Mock Law, L.P.A. in Toledo for help. Call 567-200-3573 or contact me online to discuss your situation and find out what I can do to protect your rights under Ohio law.