Asset division is a critical divorce-related issue that must be resolved before everything is finalized. As a couple, you and your spouse may have had various tangible and intangible assets – some of which you acquired before marriage, and some of which you acquired during marriage. But now that you are separating, who gets what? And how will assets be divided among the two of you?
One way your property can be divided in a New York divorce is through mutual agreement between you and your spouse. You can present your agreement to the court, and provided that it is fair, a judge will approve it.
However, if you and your spouse cannot agree on asset division, the court will decide for you. New York is an equitable distribution state, which means the judge will split your property based on what is fair. Equitable distribution applies to both tangible and intangible assets you and your spouse obtained during your marriage. Generally, it does not apply to property each of you had separately before getting married.
What Is Equitable Distribution?
As alluded to above, equitable distribution refers to a fair division of property. "Fair" does not necessarily mean that the judge will grant a 50/50 split. Instead, it means that the judge will ensure that the debts and assets each spouse receives is comparable. For instance, if one spouse takes on more debt, they might be granted more property and vice versa.
The judge will consider various factors when determining how to equitably distribute assets. These include:
- Each spouse's income during the marriage and at the time of the divorce
- The length of the marriage
- The health of each spouse
- The age of each spouse
- The custodial parent's needs
- Any loss of inheritance upon divorce
- Any loss of health insurance benefits upon divorce
- Any spousal support awarded
- Each spouses' interests in property they do not hold the title of
- Whether or not the property can be converted into cash
- Each spouses' future financial situation
- Whether the property includes interests in a business or corporation
- The tax consequences
- Whether either spouse wasted assets
- Whether either spouse transferred assets knowing a divorce was going to be filed for
- Whether either spouse engaged in acts of domestic violence
Distribution of Marital Property
In New York, courts have the authority to divide marital property. Under New York Domestic Relations Law § 236 (B), marital property includes that which was acquired during the marriage.
Examples of marital property include:
- Bank accounts
- Retirement accounts
Marital property is distributed equitably.
Distribution of Separate Property
Generally, New York courts will not divide anything considered separate property. For the most part, separate property is anything either spouse had before the marriage. In some cases, though, assets one spouse received during the marriage may be considered separate property.
For instance, the following may be separate property:
- Gifts from persons other than the spouse
- Compensation from a personal injury claim or lawsuit
- Property identified as separate in a prenuptial agreement
There may be some situations in which separate property may be treated as marital property for the purposes of asset distribution in a divorce. For example, when separate property was mixed with marital property. Other than those limited circumstances, separate property remains as is during a divorce.
Division of Debts in a NY Divorce
Debts are treated like assets. They will be distributed equitably between spouses. However, before that happens, the court must decide whether they are marital or separate property. Once that determination is made, marital debt will be divided fairly, and separate debt will go back to the spouse who acquired it.
Achieving Fairness through Distributive Awards
Distributing property can be complex, and, in some cases, it may not be feasible to divide assets equitably. For instance, it may be impractical to divide a business or corporation.
When property distribution becomes burdensome because of the nature of the assets, the court may issue a distributive award. Defined in New York Domestic Law § 236 (B), a distributive award is payment one spouse makes to another – whether in a lump sum or spread out over time – to supplement the equitable division of property.
Getting Help from an Attorney
Dividing assets in a divorce is not straightforward. You must first identify what is marital and what is separate property. As noted earlier, sometimes, the distinction can be blurred depending on how the assets were handled during the marriage.
Because there is a lot to consider regarding asset division, it is beneficial to speak with an attorney about your case. An experienced lawyer will understand New York's equitable distribution laws and can help you appropriately account for all separate and marital property. With legal representation on your side, you can ensure that you and your spouse get your fair share of assets and debts.