When you divorce in New York, all marital property will be divided in a manner that you and your spouse agree upon. If you can’t come to an agreement on your own (which is not unusual in highly contested divorces), the court will attempt to fairly divide everything using a process called equitable distribution.
What is equitable distribution?
Before DRL Section 236 B was enacted in 1980, New York was a common law property state, meaning that titled ownership was not impacted by marriage or divorce. Marital property, as such, did not exist. When a couple divorced, all assets went to the party who held the title to it. Wives left without sufficient resources to maintain themselves could seek alimony (there was no similar provision for husbands), but if a husband could prove that his wife caused the marriage to break down, she was precluded from receiving support.
Today, courts use the equitable distribution principle to divide marital assets between divorcing spouses. It is essential to note that “equitable” does not mean everything is divided 50-50. Rather, the court will try to decide which outcome is fair, given each spouse’s needs and their respective contributions to the marriage.
What is classified as marital property in New York?
Marital property is generally defined as property acquired by either spouse during the marriage. It includes but is not limited to:
- Income and retirement benefits earned by each party
- Property purchased together (includes the marital home)
- Property purchased separately while married
Separate property, like inheritances, personal injury awards, and property owned prior to the marriage, are usually kept by the spouse who owns them. However, it is always possible that separate property can become commingled with the marital estate. For example, if your father wills you a cottage in the Catskills and you use marital funds to carry out repairs or upgrades, any resulting appreciation in the value of the property can be divided in a divorce.
How does the court divide property equitably?
When determining how to achieve an equitable distribution, the judge presiding over your case will consider factors like the following:
- The length of the marriage. In general, the longer the marriage, the more inclined the court will be to award a greater portion of marital property to one spouse. During longer marriages, there is a higher likelihood that one spouse relied on the other’s income and earning ability to support the couple’s standard of living.
- The age and health of each spouse. Age and physical or mental illness can impact your ability to maintain gainful employment, making you eligible for a higher share of the marital estate.
- The income and assets of each spouse at the time of the marriage versus the time that they filed for divorce. Any large disparity could result in one spouse receiving more property than the other.
- The likely financial outlook for each spouse after the divorce. If one spouse left the workforce early in the marriage and stayed home to raise the couple’s children, their financial self-sufficiency will be affected. In addition to temporary spousal support, they may receive more marital assets.
- Whether the parent with residential custody will need to live in the marital home with the couple’s minor children.
- Whether either spouse will lose inheritance rights, health insurance, and pension access as a result of the divorce. The court may try to address any losses by awarding more property to the affected spouse.
- Whether either spouse has a claim to property they do not technically own. This can happen if one person worked to fund the other’s university degree or professional accreditation. They may then receive an amount of property equal to the value of their contribution.
- The tax consequences of the divorce for each spouse. The court will make a reasonable effort to prevent any party from being saddled with additional tax debt.
- Any other factor the court deems relevant.
The court will also consider whether you or your spouse behaved in a manner that impedes a fair outcome. Did either of you deliberately waste marital funds on a new partner? Did one of you transfer property at a rate below fair market value once you realized that divorce was inevitable? Did either one of you cause the case to be delayed or were you overly litigious?
What if one spouse owns a business?
If you owned a business before getting married and your spouse subsequently made contributions that increased the value of the property, you may not be able to treat it as strictly separate property upon divorce. Although each case is different, the usual outcome is for the court to award you the business itself and give your former spouse an amount of property that reflects the value of their contributions.
Do you have more questions about equitable distribution?
If you are facing divorce and can’t reach an agreement with your spouse regarding property division, a New York divorce attorney can protect your rights during negotiations and even in court if the matter has to be litigated. Although the court will strive to be fair, expert legal counsel can help you get the resources you need to begin anew after the divorce is over.
Jayson Lutzky is a Bronx, New York divorce lawyer with over 37 years of experience. If you are going through a divorce and own property, then it is important to speak to a qualified attorney. Call Mr. Lutzky’s office at 718-514-6619 to set up a free initial in-person consultation to discuss your situation in a holistic manner.
Recently On Our Blog