Equitable Distribution In New York- A Simplified Guide

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Divorce is a complex and often emotional process that can involve numerous legal and financial considerations. One of the key aspects of a divorce case in New York State is the division of marital assets and debts, which is governed by the law of equitable distribution. This guide is intended to give you, the reader, a general understanding of the basic principles of equitable distribution in New York, but it is not intended as legal advice, as it cannot take into account the facts of any particular case, and because the law of equitable distribution frequently changes.

What is Equitable Distribution?

Equitable distribution is a system of dividing marital property and debts between spouses in a divorce. This means that the court is supposed to distribute assets and debts in a way that is equitable, or fair, to both parties. While this does not necessarily result in an equal distribution, where the court would simply divide everything 50/50, in practice, as the length of the marriage becomes greater, the likely distribution trends towards 50/50.

Marital Assets and Separate Assets

Before the court can distribute assets and debts, it must first determine what property is marital and what is separate. Marital assets and debts are those that were acquired during the marriage and belong to both spouses, or otherwise put, are subject to equitable distribution. Separate assets and debts are those that were acquired by either spouse before the marriage or by gift or inheritance during the marriage and are considered the separate property of that spouse.

It is important to understand that, in the event of a divorce, the party who is asserting that assets are separate assets, has the burden of proof on that issue. This burden of proof can be difficult to sustain, especially when assets have been moved around from bank accounts to other bank accounts, or from bank accounts to other assets, such as homes, other real property, or businesses.

Marital assets and debts include:

  • Real property (houses, apartments, etc.)
  • Personal property (furniture, jewelry, etc.)
  • Bank accounts
  • Retirement accounts
  • Investments
  • Business interests
  • Debts (credit card debts, loans, etc.)

Separate assets and debts include:

  • Property owned by either spouse before the marriage
  • Inheritances received by either spouse during the marriage
  • Gifts received by either spouse during the marriage (unless given to both spouses)
  • Debts incurred by either spouse before the marriage or after separation

Appreciation of Separate Assets

In some cases, the value of separate assets can appreciate during the marriage. For example, if a spouse owned a house before the marriage and the value of the house increased during the marriage, that appreciation may be considered marital property.

The court will consider the following factors to determine if the appreciation of separate assets is marital property:

  • The length of the marriage
  • The amount of effort the spouse put into the asset (for example, if a spouse improved the house)
  • The use of marital funds to improve the asset
  • Any other relevant circumstances

Courts often distinguish between “passive” and “active” appreciation of separate assets. For example, if one spouse has a stash of gold or precious metals and the value of gold, silver, platinum, etc increases without any input or activity by the spouse, this type of appreciation of value would not be considered to be marital property. On the other hand, if one spouse has a brokerage account with various stocks in his or her own name at the time of marriage, and actively manages the account, making stock trades, the appreciation of the brokerage account would likely be considered to be marital property even if the other spouse had no role in managing the account.

This is because in New York State, marriage is considered to be a complete partnership between spouses which includes all aspects of the spouses’ lives. NY Courts will consider that a stay at home wife’s homemaking efforts along with her emotional support help her husband to earn money and build wealth, and these homemaking efforts may entitle her to one half of the value of all marital assets. This can even be true if the stay at home wife has the benefit of maids, cooks, nannies, and housekeepers.

Distribution of Marital Assets and Debts

Once the court has determined which assets and debts are marital and which are separate, it will then proceed to distribute the marital assets and debts in an equitable manner. This means that the court will consider a number of factors to determine what is a fair and just distribution.

The following factors are considered when distributing marital assets and debts:

  • The income and property of each spouse at the time of the divorce
  • The length of the marriage
  • The age and health of each spouse
  • The future income and earning capacity of each spouse
  • Any award of maintenance (alimony)
  • Any award of child support
  • Any debts and liabilities of each spouse
  • Any contributions made by either spouse to the marriage (such as paying for the house or supporting the other spouse’s education)

In order to distribute assets and debts, the court may order the sale of certain assets, such as a house or a business, and then divide the proceeds between the spouses. The court may also order that certain assets be transferred from one spouse to the other, or that each spouse keep certain assets.

For example, if one spouse owns a house in their name and the other spouse does not, the court may order that the house be sold and the proceeds divided between the spouses. Alternatively, the court may order that the house be transferred to one spouse, and that the other spouse receive a different asset of equal value to compensate.

Income and Retirement Accounts

Income and retirement accounts are also considered marital assets that must be divided in a divorce. This means that any income earned during the marriage, as well as any increase in the value of retirement accounts, pensions, or other benefits, which takes place during the marriage, must be divided between the spouses. The court will consider the length of the marriage, the age and health of each spouse, and other factors when determining how to distribute these assets.

In some cases, the court may order that a portion of one spouse’s future income or retirement benefits be paid to the other spouse as part of the divorce settlement. This is called “maintenance” or “alimony.”

Child Custody and Child Support

Child custody and child support are separate issues from the distribution of marital assets and debts. Child custody refers to the legal and physical responsibility for the care of the children of the marriage. Child support refers to the financial support that one parent is required to pay to the other parent to help support the children.

However, because NY Courts have such wide leeway in deciding how to divide marital assets, issues of child custody and child support may be considered as factors in determining equitable distribution.

The Role of a Divorce Attorney

If you are going through a divorce in New York, it is important to have the assistance of a knowledgeable and experienced divorce attorney. A divorce attorney can help you understand the law of equitable distribution and how it may impact your case. They can also help you gather and present the information and evidence necessary to make your case in court.

In conclusion, an experienced divorce attorney can help you negotiate a fair and equitable settlement with your spouse and can represent you in court if necessary. They can also provide you with advice and guidance throughout the divorce process, and help you make informed decisions about your future.

The law of equitable distribution in New York State is a complex area of law that requires a thorough understanding of the factors that the court considers when distributing marital assets and debts. Whether you are a spouse seeking a fair distribution of assets, or a party seeking to protect your separate assets, it is important to have the assistance of a knowledgeable and experienced divorce attorney.