The law in New York for the division of marital assets in a divorce is equitable distribution. Equitable distribution does not necessarily mean equal, although that is usually the starting point, it means what is fair. The job of your New York City, Long Island or Nassau County Divorce Lawyer is to show what is fair. New York Domestic Relations Law Section 236 is where the statutory provisions of this law can be found. The parties to a case may have made an agreement during or before the marriage about custody of children, child support, will provisions, maintenance (formerly known as alimony) and determinations of separate property and how marital property is to be divided or distributed which is the subject of this blog entry. These agreements are commonly called prenuptial, post-nuptial, separations agreements or stipulations of settlement.
If the agreement is in writing, subscribed, acknowledged, or proven with the same formalities necessary to record a deed, the agreement should be honored in a matrimonial proceeding. Future blog entries will have more details about marital agreements. Different processes may be used for parties to settle their issues such as mediation, collaborative law, settlement discussions, and negotiations in litigation. How is the law applied, however, when there is no settlement, prenuptial agreement, separation agreement or post nuptial agreement?
First, the determination of what is separate property and what is marital property must be made. Marital property is broadly defined in New York as property acquired from the date the parties were married to the date of a legal separation (not just physical separation), or the start date of a matrimonial case. From that broad definition of marital property separate property must be carved out. It is the burden of the person that is claiming something as separate to properly make that claim. Separate property includes whatever was already agreed upon in a properly made written agreement. Also, that which someone received before the marriage or by gift from someone besides their spouse or from inheritance is classified as separate property. Personal injury compensation, too, is listed as separate property. Increases in value of separate property is also separate, except if the increase in value is due in part to the contributions made by the spouse (this is commonly called sweat equity). The rest of the property acquired during the marriage is subject to equitable distribution.
After the case is started, the parties may agree upon a valuation date of the asset, or the court should the valuation date which can be a date anywhere from the filing date of the case to the date of trial. Experts can and should be used when there is not an agreement about the value of an asset. The experts might be an appraiser; a forensic accountant; vocational expert; or other individual with the requisite knowledge, background, and training to aid in the determination of value. Valuations of businesses, enhanced economic capacity from licenses and degrees and retirement asset valuations are among common items that a financial expert might be necessary to weigh in on for the case.
It is the lawyer’s job to convince a court, or the other side to a case, how the value of that asset should be distributed among the parties. To determine what is fair and equitable in each case the court is supposed to consider a number of factors according to the statute. Your lawyer’s job is to argue the importance, or non-relevance of these items. A list of some of the pertinent factors enumerated in the Domestic Relations Law is as follows.
The property and income of the husband and wife when they were married and when the case is started is important.
How long was the marriage? What are the parties’ ages and health?
Does a parent with custody of the children need to own or stay in the marital residence or own the items from the residence?
What is the inheritance loss and loss of pension rights when the marriage is dissolved?
Is the loss of health insurance when the marriage is terminated a factor?
Is there any maintenance being ordered?
What direct or indirect contributions were made by the spouse that does not have title in acquiring the marital property including expenditures, dual efforts, and contributions as a money earner, homemaker, spouse, parent and to the career or potential of the spouse?
What is the liquidity of all the marital assets?
What is the likely future financial situation of both the Husband and the Wife?
What challenges are there in doing an evaluation of any part or interest in a business or business entity and the financial interest of one party having that interest or asset without any involvement or claim from the other?
What is the tax impact going to be to the Wife and Husband?
Did the Husband or Wife waste any of the marital assets?
Did either of them transfer anything prior to the marital case in contemplation of the action for less than fair value?
A court may consider other factors which it specifically finds to be fair and proper to consider.
Instead of ordering distribution of an asset or in addition to the ordered distribution a court can make a distributive award. The marital residence and its effects can be ordered by the court to be occupied by one of the parties even if ownership is different.
For further questions about equitable distribution, divorce, mediation, family law, matrimonial law or collaborative law please click around my other blog entries or my website. Feel free to contact me or my office as well. It would be our pleasure to speak with you about it.