When a couple gets divorced in New York, a family court judge will divide their marital property equitably. Judges don’t always divide marital property in a 50/50 split. Instead, they use multiple factors to determine what type of property division is fair for both spouses. New York’s equitable division process can be complicated and difficult to understand. Below, we will discuss some of the most frequently asked questions we receive as divorce lawyers in New York.
What Does Equitable Distribution Mean?
Equitable division is how New York family court judges divide marital property when a couple gets divorced. Before New York adopted laws that require equitable division, they were a common-law property state. In other words, the court would distribute the property to whichever spouse held the title to the property.
New York is now considered an equitable distribution state. Specific statutes address how judges must decide to divide up a couple’s property when they divorce. The overarching principle behind equitable distribution is fairness. Judges seek to divide the property in a way that is fair and equitable to both spouses.
What is Considered Marital Property?
Not all property that the spouses own is subject to equitable division. Courts can only divide property that is considered marital property. Spouses get to keep all of the property they owned separately. In most cases, marital property includes any property either spouse acquired during the marriage, regardless of who paid for the property. Marital property typically consists of the following:
- Both spouses’ income earned during the marriage
- Property purchased with either of the spouses’ income
- Any property either spouse purchased while married
- Each spouse’s retirement benefits earned during the marriage
- The appreciation in value of marital property while the couple was still married
What is Considered Separate Property?
Judges cannot divide up the separate property that the spouses brought into the marriage. Instead, each spouse is entitled to keep his or her separate property unless the other spouse contributed to an increase in the property’s value. Separate property includes any property either spouse obtained before the marriage, compensation for a personal injury through a lawsuit or insurance settlement, and property a spouse inherited or received as a gift.
Spouses have a right to keep their separate property, but not the appreciation gained from that separate property. For example, if a spouse had a lump sum in an investment account before he or she got married, but the account earned interest throughout the marriage, the interest would be considered marital property.
What Factors Do Judges Use to Divide Property in a New York Divorce?
Under New York law, judges consider multiple factors when deciding how to equitably divide the marital property, such as:
- The length of the marriage
- Each spouse’s health and age
- Each spouse’s property and income when they married and when they filed for divorce
- Whether the court has awarded alimony or spousal maintenance
- The requirement for the parent with physical custody of the child or children to live in the family home
- The health insurance, inheritance rights, or pension that either spouse will lose due to the divorce, valued at the date of the divorce
- The non-liquid or liquid character of the marital assets
- The probable future financial circumstances of both spouses
- Whether the marital property includes a business or corporation and the difficulty of valuating that interest
- The tax consequences of the divorce to each spouse
- Whether either spouse has wasted marital assets leading up to the divorce
- Whether either spouse has encumbered or transferred marital property without fair consideration because of the divorce
- Whether either spouse has contributed through labor, money, or efforts as a parent or homemaker to the marital property
- Any other factor the court finds to be a just and proper consideration
Can a Court Divide My Business?
When our clients own a business, they are often concerned about what will happen to their business after the divorce. Many times we are asked whether a judge can divide up their business or make them sell their business. In New York, businesses are subject to equitable distribution. That means that professional practices, businesses, and even a spouse’s enhanced earning capacity can be considered property by the court. In some cases, courts even consider a person’s educational degree, professional license, or attainment in their career to be property when considering how to divide assets.
Dividing up a business can be extremely challenging and complicated. Sometimes one spouse is willing to give up any equity in the business to receive another asset, such as the family home. In other cases, both spouses do not want to lose any ownership or interest in their business. The court may require one spouse to pay the other spouse to leave the business.
In rare cases, it is possible that a judge could order the couple to sell the business and share the profits. Suppose you own a business and you are concerned about equitable division. In that case, it is wise to speak to an experienced divorce lawyer as soon as possible who can advocate for you to keep your interest in the business.
Contact a New York Equitable Division Lawyer Today
New York judges have a significant amount of discretion when it comes to dividing property in a divorce. If you are going through a divorce, you need an experienced and assertive lawyer who will protect your interests during the divorce process. The outcome of the property division will have a significant impact on your financial life after your divorce, and you do not want to take any unnecessary risks by hiring an inexperienced lawyer. Contact the law offices of Jayson Lutzky today to schedule your initial consultation and learn how he can advocate strongly on your behalf.