Marital assets, and debt, in New York generally are things that are acquired during the marriage that does not fall under the exception of separate property. Separate property, in general are things that a spouse entered the marriage with that was kept separate throughout the marriage. Property acquired by gifts or inheritance that are kept separate also usually fall under the category of separate property. Marital assets are broadly defined while separate property is narrowly defined. It is the burden of a party claiming something to be separate property to prove that claim. In a divorce, separate property needs to be identified, while the marital assets and debt need to be distributed.
Equitable could mean equal or something different when distributing property in a dissolution of a marriage in New York. Equitable means what is fair. Sometimes there are pre or post-nuptial agreements or a separation agreement that already dictate how property should be divided. Usually these agreements are honored but there are circumstances when a court could void them or set them aside. If there are no agreements in place, the parties and their attorneys can agree upon what is equitable. If there is no agreement on what is fair, then equitable distribution becomes the job of the judge.
But isn’t everything just divided in half in a divorce? Usually that is the case for marital assets and debt, but it is not a foregone conclusion. Sometimes the split might be that eighty percent of the marital assets go to one spouse with twenty percent to the other. Sometimes the split is equal after an application of credits to one side before the division. Some assets are given entirely to one spouse, while others are shared in some way at times.
So how is it all determined? In a mediation, collaborative law matter or negotiated case it is what is agreed upon by the parties. In a case that goes all the way to trial, a judge makes a decision after a full hearing or trial on all the facts and circumstances. First I’ll outline cases in which the distribution was found to be equal. Next, I’ll give examples of cases that the distribution was something other than equal. Finally, I will summarize the equitable distribution statute upon which the cases are to be decided under in New York.
Equal division was held by an appellate court to be proper in a twenty two year marriage where both the husband and wife contributed the same towards the accumulation of property. Ahrend v Ahrend, 507 NYS2d 202 (2nd Dept. 1986). The trial court had given the wife eighty percent of the expected proceeds from the sale of the marital residence and the husband twenty percent. The appellate court overturned that decision and awarded both sides fifty percent of the profits.
Another case where equal distribution was found to be appropriate was Miller v Miller, 513 NYS2d 764 (2nd Dept. 1987). In that case the parties were married for twenty years. The husband worked full time as a principal, while the wife was a homemaker with a high school education that worked part time. The court found that their financial and other contributions should be credited equally. The court ordered that each should get an equal share of the husband’s pension and the marital home. The wife, however, was allowed to remain in the home until the children turned twenty one. Upon the sale the wife was to receive a credit for whatever contributions she made to the mortgage after the judgment of divorce before the rest of the proceeds were divided.
When appropriate, certain credits can be applied before splitting the marital property. For example in Hutchings v. Hutchings, 547 N.Y.S.2d 970 (4th Dept. 1989) the husband was to receive a credit for a $10,000.00 educational loan he assumed payment upon before dividing the marital assets. The court held that the husband did not deserve fifty percent of the assets when he made less than an equal contribution to the marriage. Naimollah v. De Ugarte, 795 N.Y.S.2d 525 (1st Dep’t 2005). The court found that the husband made little contributions to the family and the judge did not believe his testimony about his homemaking and child care efforts.
Thirty five percent of the marital assets was found to be appropriate by the highest court in New York, the New York Court of Appeals in Fields v Fields, 15 N.Y.3d 158 (2010). The couple was married for thirty five years and both made financial and non-financial contributions to the marriage and their child. The court took into account that both did not invest in the purchase of one of the major assets, and the two lived in separate units of a townhouse for twenty eight years.
In another case, the court ordered that there be no distribution of assets in the other’s name rather each party would keep the assets they currently possessed. Francis v. Francis, 286 A.D.2d 749 (2nd Dept. 2001). When the case was started the couple lived apart for the past thirty seven years. When they separated originally, they each had nothing. The wife lived with and had a child with another man while they were living apart.
So, what is the law that judges are supposed to use to come up with these different results? It is contained in the Domestic Relations Law and provides in summary (but not limited to), the following. A court can consider: income; property when they were married and when the case was started; the health and age of both as well as the length of the marriage; whether a parent with custody needs to live in the marital home; inheritance and pension losses due to the divorce; the loss of health insurance; contributions to obtaining the marital property and career of the other; a maintenance award (alimony); the liquidity of marital assets; the predicted financial position of each moving forward; the difficulty of valuing a business or the attractiveness of keeping a business free from one party’s interference; tax issues; waste; attempts to hide assets; or the catch all of any other appropriate just factor.
As you may be able to tell, the law of equitable distribution, as most family law issues, is not an exact science. Rather it is an art. Creative solutions, arguments, and crafting can effect the resolution of each case. Please click around our website and blog for more information about different family law and divorce topics. For a free consultation with a litigator, collaborative attorney or mediator, please call to discuss or schedule an appointment. It would be our pleasure to speak with you about your situation.