Navigating a divorce can feel like steering through uncharted waters, especially when it comes to property division. In New York, courts follow a system that attempts to divide assets fairly, but it can be hard to understand how this system works.
In this article, we explore New York’s equitable distribution system, shedding light on how assets and liabilities are split in a divorce.
Understanding "Equitable Distribution"
When couples in New York face divorce, the term "equitable distribution" becomes a big part of the proceedings. New York uses this distribution system. Equitable distribution is rooted in “fairness,” not “equality.”
Divorcing spouses in New York should not expect to walk away with 50% of the marital property. Instead, New York courts attempt to split assets justly and appropriately, considering the circumstances of each case. The division of property is tailored to the needs and contributions of each spouse rather than splitting everything down the middle.
For example, a spouse who gets primary child custody may be allowed to keep the home. Such circumstances can happen even if the home is highly valuable, and the other spouse loses access to that equity.
Equitable distribution recognizes the complexities of marital partnerships and the diverse contributions each partner can make. Factors like financial support, homemaking, and raising children help determine what's fair. New York courts take a holistic view of the marriage, aiming to reach a settlement that respects the efforts of both spouses.
Factors That Influence Equitable Distribution
When deciding on asset division, New York courts consider several factors, including:
- The length of the marriage
- The age and health of each spouse
- The loss of inheritance and pension rights upon divorce
- The contribution each spouse made to marital property
- The future financial circumstances each spouse is likely to face post-divorce
For instance, a long-term marriage where one spouse has significantly less earning potential may result in that spouse receiving more assets. Another example may include a marriage where one spouse supports the other during a career change. The spouse who changed careers could make far more money now, and the court may decide that the contributing spouse should receive more of the assets.
The equitable distribution process is designed to leave both parties with a financial advantage. It attempts to help both spouses move forward with their lives on stable financial ground.
Marital vs. Separate Property
Defining Marital Property
Marital property generally includes all assets and income acquired during the marriage, regardless of whose name is on the title. This property includes everything from real estate and vehicles to investments and business earnings. Technically, if one spouse buys a candy bar, the other spouse is considered a co-owner of that confection.
The underlying principle behind marital property is that marriage is a partnership, and the fruits of that partnership are subject to division upon divorce.
The definition of marital property is broad. It can include real property and less tangible assets such as professional licenses and advanced degrees earned during the marriage. The courts scrutinize the financial history of the marriage to determine what constitutes marital property.
Defining Separate Property
Separate property refers to assets that belong to only one spouse. This property is typically excluded from division, meaning the spouse who owns it can keep it after the divorce.
Separate property includes:
- Inheritances
- Gifts from third parties
- Compensation for personal injuries
- Property acquired before the marriage
The distinction between separate and marital property can become blurred, particularly when separate property has been commingled with marital assets. For example, both spouses may have used and contributed to a pre-marital bank account during the marriage.
Also, when separate property appreciates, and the other spouse contributed to that value, the property may be considered marital property. For example, if one spouse inherits a home, and the other contributes to its renovation, this increase in value may be subject to division.
Strategies for Protecting Your Property
First, inventory all assets and liabilities. Know what you own, its value, and any debt you have. Solid records are useful during negotiations. Receipts, titles, and financial statements can prove ownership and value. Even if this property is marital, you want a strong paper trail of who purchased what and who contributed to it.
Communicate openly with your spouse. Many overlook this strategy, but direct negotiation can lead to favorable outcomes. It can also allow you to avoid court.
Consider mediation. In this process, a neutral third party helps you resolve disputes and reach a fair agreement.
Hire a skilled attorney. Legal counsel guides you through complex laws, protecting your interests.
Finally, keep separate property untouched. Avoid commingling inheritances or pre-marriage assets with marital property. This distinction often exempts such assets from division.
Following these strategies can safeguard your interests in an equitable distribution system, providing a sense of security and control during a challenging time.
If you are concerned about your property in a divorce, Jason M. Barbara & Associates, P.C. can help. We are here to protect your interests and help you reach a fair, reasonable resolution in your divorce. For a free consultation, contact us online or call us at (516) 406-8381.