What is Marital Property and Separate Property in New York Divorce?

man handing car key to womanMarital property is broadly defined, in the New York Domestic Relations Law, as all property obtained after the date of the marriage and prior to the signing of a separation agreement or the filing of a matrimonial case, without regard to the form that title is held, unless a proper agreement provides differently.  Separate property is excepted from inclusion in marital property under the law.  Separate property means:  property acquired prior to the date of marriage or property received by one spouse by inheritance or gift from someone besides their spouse; personal injury compensation; property received for or the increase in the separate property value, except any portion that is partly as a result of the efforts or contributions of the spouse; or property that is identified as separate pursuant to a properly made written agreement.  As a New York City area and Long Island Divorce Lawyer, what is marital and separate property is something that I constantly need to sort out.

To be a proper enforceable agreement that defines marital and separate property, the agreement could have been made before or after the marriage.  Agreements before the marriage are pre-nuptial agreements and those after the marriage are called post-nuptial agreements.  Stipulations of settlement of a divorce or separation proceeding can also resolve what should be categorized as separate property or marital property and would be a form of a post-nuptial agreement.  These agreements need to be written, and subscribed, acknowledged or “proven” in the manner necessary for a deed to be accepted for recording.  An acknowledgment is usually a simple paragraph, signed before a notary, affirming that the agreement:   was signed by that person; that they read it; and that it was made knowingly, intelligently, freely and voluntarily.

The law provides that a pre-nuptial agreement can be acknowledged before someone that is allowed, by law, to marry people. Besides defining marital and separate property, New York Domestic Relations Law Section 236(B)(3) outlines that the agreement can have (1) a contract to include a provision in a will or to waive the right to elect against a will; (2) the amount and duration of maintenance (alimony) or other terms or provisions of the marriage as long as they are in line with the New York General Obligations Law and the agreement is fair and reasonable when the agreement was made and not unconscionable at the time of a divorce judgment; and (3) custody, child support, care and education of a child subject to Domestic Relations Law Section 240.

So, what kinds of things does marital property include? Retirement and pension benefits that are acquired during the marriage, real estate, automobiles, art, furniture, bank accounts, stocks, advanced educations degrees, businesses, and permits to engage in specialized businesses may be included as marital property.  The foregoing list is illustrative but not necessarily exhaustive of the only things that may be marital property.  Marital property is equitably distributed in a divorce in New York.  Equitable distribution means what is fair, not necessarily equal distribution.  What is equitable will be decided by a judge if an agreement can not be made.

Separate property is not divided in a divorce. Separate property, however, can lose its character as separate if it was commingled with marital property.  For example, putting separate funds into a joint account for more than a brief convenience moment in time can cause it to be considered marital property.  Whether someone is entitled to a separate property credit, for example for separate funds used towards the purchase of marital property can be a point of argument.  Also, whether someone deserves a credit for marital funds used to maintain the other spouse’s separate property might be argued.  Contributions that a spouse made to the increase in separate property can be a contentious matter.  A debate can ensue on whether those contributions transmuted the separate property into marital property, or whether a credit is appropriate in the distribution or not.  Often a court will be reluctant to sort out expenses that were paid during the course of a marriage, but will do so in appropriate circumstances.

Valuations of property that will be distributed, if not otherwise agreed upon, can be done by experts, appointed by the court, such as appraisers, accountants, or financial specialists. How that property is equitably distributed is where the art of advocacy comes in.  An experience matrimonial attorney is best equipped to advise someone on equitable distribution issues including marital and separate property.  For more information on various matrimonial, family law, mediation, and collaborative law matters please click around our website and blog.  Feel free to contact us about your free initial consultation as well.  It would be our pleasure to speak with you about it.