Equitable Division Of Assets
When going through a divorce, you are not only legally separating from your spouse, but also legally dividing all of the property (assets and debt) that was acquired during your marriage. When beginning the property distribution process, it is vital to have an experienced lawyer on your side who will work as your advocate, helping you toward your new life and a fresh start.
The Law Office of David Bliven will help you to understand the law as it relates to your case and will work to ensure you are treated fairly throughout the process.
Property Division in Westchester County and Bronx County
New York is an equitable property state. This means that any property accrued during your marriage is subject to distribution between parties. “Equitable,” otherwise known as “fair,” means that the court will use its discretion to determine how and to whom property will be awarded. Some examples of marital property are as follows:
- Homes and other real estate properties
- Retirement plans (pensions, 401(k)s)
- Professional degrees and licenses
- Art, decor and other personal property
- Cars, boats, RVs, etc.
In our 20 years of experience, we have handled cases involving simple distributions, as well as extremely complex asset and debt division disputes. Through the use of neutral experts such as forensic accountants and investigators, we conduct thorough searches to uncover hidden assets that would be relevant to your case.
What’s the Difference between Marital Property & Separate Property?
Often a share of significant assets can turn on the precise definition of what constitutes “marital property” versus “separate property.” In a nutshell, a non-title-holding spouse gets a share of marital property, but does not share in separate property (though there are many exceptions to this).
New York Domestic Relations Law section 236 defines “marital property” as all property acquired by either or both spouses during the marriage and before the execution of a separation agreement or the commencement of a matrimonial action, regardless of the form in which title is held,” except pursuant to the terms of a validly-drawn separation agreement, pre/post-nuptial agreement, or stipulation of settlement.
The same statute defines “separate property” to mean (1) property acquired before marriage or property acquired by bequest, devise, or descent, or gift from a party other than the spouse; (2) compensation for personal injuries; (3) property acquired in exchange for or the increase in value of separate property, except to the extent that such appreciation is due in part to the contributions or efforts of the other spouse; (4) property described as separate property by written agreement of the parties (as described above).
What are the Factors Considered in a Divorce on Property/Asset Issues?
The statutory factors pursuant to Domestic Relations Law 236 are:
- the income and property of each party at the time of marriage;
- the duration of the marriage and the age and health of both parties;
- the need of a custodial parent to occupy or own the marital residence and to use or own its household effects;
- the loss of inheritance and pension rights upon dissolution of the marriage as of the date of dissolution;
- the loss of health insurance benefits upon dissolution of the marriage;
- any award of maintenance under subdivision six of this part;
- any equitable claim to, interest in, or direct or indirect contribution made to the acquisition of such marital property by the party not having title, including joint efforts or expenditures and contributions and services as a spouse, parent, wage earner and homemaker, and to the career or career potential of the other party;
- the liquid or non-liquid character of all marital property;
- the probable future financial circumstances of each party;
- the impossibility or difficulty of evaluating any component asset or any interest in a business, corporation or profession, and the economic desirability of retaining such asset or interest intact and free from any claim or interference by the other party;
- the tax consequences to each party;
- the wasteful dissipation of assets by either spouse;
- any transfer or encumbrance made in contemplation of a matrimonial action without fair consideration;
- any other factor which the court shall expressly find to be just and proper.
Under the “any other factors” application, a Judge may consider such things as financial assistance from the parents of one spouse which allowed for the accrual of assets and/or property, unpaid work one spouse performed in the other’s business as well as the period of physical separation of the parties prior to the commencement of the divorce. One common factor usually NOT considered in the distribution of property/assets is marital fault.
What are the types of “marital property” divisible in a Divorce?
There are many different types of assets – other than houses & Condos – which are valued & divided in a divorce case.
Real property, bank accounts, interests in businesses, bonuses, educational degrees, tax shelters, investments, jewelry, wedding gifts, personal property (including furniture), gifts exchanged between spouses, vested & unvested pension rights, vested or unvested, matured or unmatured pension rights, profit-sharing, retirement & savings plans, value of assets in a family asset protection trust, severance payment, value of “book business” of a broker, face value of insurance, frequent flyer miles and church (even if operated as non-profit). [Source: “NY Law of Domestic Relations,” West Publishing by Alan Scheinkman.]
Common forms of separate property are premarital property & assets, inherited property/assets, gifted property/assets (when clearly gifted to only 1 spouse) and personal injury compensation. The bottom line is that these are general rules & there are many exceptions made to the general rules. Each case is ultimately decided on its own merits and each situation brings to the table unique facts.
How to divide equity in a house during a divorce?
With the increasing cost of housing, many intact couples do not find they have a ton of money left over after paying their mortgage as well as their basic living expenses. When those same couples split up, however, they may be left with less money than is necessary to meet those expenses.
While the real estate market is not great right now for sellers, if the mortgage is otherwise eating you alive, you may have no choice but to sell. Couples often budget a mortgage factored on two incomes coming into 1 household. When the couple goes through a divorce, now they are left with trying to support 2 households – meaning 2 sets of utility bills as well as both payment of the mortgage & payment of rent for one of the parties who’s moved out. It’s not uncommon for this to leave the parties at the break-even point, or even leave them with less money than is needed to pay all their basic expenses. If this is the case, then the best option is to immediately put the house on the market & salvage what you can of the equity.
The other option – if one party wishes to keep the house but the parties cannot afford to fund 2 households – is for the party wishing to keep the house to get a co-signor on the mortgage. That way, the party giving up his/her rights can get a buy-out from the refinance & go on with his/her life. Making these decisions sooner rather than later in the divorce process will save on attorney’s fees as well as preserve equity you’ve worked so hard to build up in the house.
Spouse is disabled – how to structure divorce settlement?
Sometimes a spouse is disabled – even in a nursing home, mental facility or rehabilitation center. The question becomes if there are “things to know” regarding how to proceed.
If the issue is your spouse being psychologically disabled & in a mental facility, then you may need to serve him/her via the Mental Hygiene Law. This usually entails an application to the Court to approve service of process on the Director of the facility. The Court may also require you to file an application to have a guardian appointed for your spouse.
Another thing to consider is division of assets and/or maintenance (i.e., alimony). If your spouse is disabled & his/her living expenses are covered by the government (usually via SSD or Medicare), then you may be best advised to set up a “Special Needs Trust.” This is a vehicle allowing for transfer of money and/or assets to your spouse and having same administered by a trustee (who usually charges a nominal fee). The primary purpose of same is to avoid the government considering that money or assets to be your spouse’s – and thus reduce or eliminate their qualification for government benefits.
Preparing for Distribution
Before you begin the divorce process, it is important to open and maintain a separate bank account from your spouse. New York law states that once you file for divorce, you may not transfer funds or assets without the court’s permission.
The division of property can easily become a malicious and contentious battle. To avoid any unnecessary conflict, and to ensure your property is divided in a fair and economical manner, call 914-468-0968, or contact us online to speak with a White Plains property division attorney about your case.