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Articles Posted in Equitable Distribution

New York is an equitable distribution state. Thus, when it comes to dividing up a couple’s assets in a New York divorce case, the court will consider a number of factors. However, before the court gets to the point of dividing up the assets, it needs to determine which assets are subject to the equitable distribution rules.Only marital property is subject to equitable distribution. And as a general matter, property that is determined to be the “separate property” of one spouse will remain with that spouse. Courts use a common-sense approach when determining whether property is marital or separate property. Under New York Domestic Relations Law section 13-236, separate property includes property acquired before the marriage and property that was gifted to one spouse by someone other than the other spouse.

In addition, “property acquired in exchange for [separate property] or the increase in value of separate property” will be considered separate property unless the increase in value is due in part to the “contributions or efforts of the other spouse.” This last category of separate property is often the subject of much dispute. A landmark case decided by the New York Court of Appeals set forth the framework regarding how courts view these claims.

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When most people get married, they take into account their prospective spouse’s financial situation. Indeed, to some degree, it would be foolhardy not to take this information into account, given that in most cases a married couple acts as an economic partnership, sharing in both income and expenses. Indeed, New York courts take this reality into account when it comes to dividing up assets following a New York divorce proceeding.The idea behind the economic partnership model of marriage is important to grasp when it comes to understanding how courts divide assets following a New York divorce. New York is an equitable distribution state, meaning that the court does not merely divide up all assets 50/50 and send the parties on their way. Instead, courts take into account a number of factors in determining how to divide a couple’s assets.

New York Domestic Relations Law Article 13 section 236 outlines the criteria courts use to equitably distribute assets after a divorce. In all, the statute lists 13 considerations, including the duration of the marriage, as well as the age, income, and education of the parties. Courts will also consider the sacrifices one spouse made for the benefit of the couple. In addition, courts are able to consider “any other factor which the court shall expressly find to be just and proper.”

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When a couple goes through a New York divorce proceeding, the court is tasked with dividing up the couple’s assets and liabilities. While this may seem intuitively simple, in practice, dividing up assets and liabilities that have accrued over the course of a relationship can be exceedingly complex. In New York, courts use a method called equitable distribution to do this.When a judge uses equitable division to divide up assets and liabilities, the judge takes into account many factors about the couple, including their roles in the marriage, level of education, income-earning potential, and future obligations. The judge will generally not include separate assets or liabilities that were obtained or taken on prior to the marriage.

Back in 2009, the New York Court of Appeals issued an important decision discussing how lower courts should equitably distribute certain assets and liabilities.

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The process of divorce isn’t just complicated because it creates a lot of uncomfortable emotions for the people involved.While the stress, sadness, and anger that can emerge during the divorce process can be difficult to manage for some, another important thing to remember is that it’s crucial to ensure you’ve covered all the different elements that you need to think about as a divorce takes place. Using an alternative resolution process like mediation can help minimize the emotional turmoil by avoiding an adversarial process. In mediation, like any process though, parties will need to consider how they’re going to manage child custody and visitation agreements, while others will need to think about how they can address the equitable distribution of debts and assets between both parties.

As a divorce attorney, child custody lawyer, and an experienced mediator, I attempt to offer my clients as many options as possible when it comes to helping them decide how to simplify divorce and prepare for the next stage of their life. Often, mediation can emerge as a less combative solution for coming to decisions about everything from spousal support to asset distribution. Because there are no cemented rules in place for how a mediation should take place, every session I conduct is shaped by the parties that are involved. After all, just as every couple, individual, and family is unique, every mediation session should be one-of-a-kind too. Continue reading ›

Addressing your Most Frequently Asked Divorce QuestionsAs a divorce attorney, I do my best to keep my clients informed and educated about each step of their divorce procedure. Often, this means answering some of the most common questions that might arise about the complications of marriage dissolution. To help people facing family law issues to address some of the most typical concerns surrounding divorce, I’ve put together this list of some frequently asked divorce questions that I have answered in my previous blogs and web site pages.  Child custody, parenting time, child support, maintenance (spousal support) are important issues that need to be decided in a divorce as well but I do not discuss them in today’s blog.

Question 1: What Are New York Divorce Residency Requirements?

Parties to a divorce in New York must meet the residency requirements for the state, or their case may be dismissed. To apply for a divorce, residents must meet with the following requirements:

  • The marriage ceremony must have taken place in New York, and one spouse must have had legal residence for at least one year prior to action taking place.
  • Both spouses lived as a married couple in New York, and one or both residents has been considered a resident for at least one year prior to action taking place.
  • The grounds for divorce took place in New York, and at least one spouse has been a resident for at least one year prior to action taking place.
  • The grounds for divorce took place in New York and both spouses were residents at that time.
  • At least one spouse was living in New York as a resident for at least 2 years prior to filing the case.

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When a marriage is ending, unless there is a valid agreement between the parties, it is left up to the judge to determine the financial responsibilities of the parties in what they call in New York equitable distribution. In most cases, this requires the judge to figure out all of the marital assets as well as the marital debts. Student-loan debt is no exception; however, calculating which party is responsible for the payment of student-loan debt may be more complicated that it initially seems.

Student-Loan Debt Incurred Before the Marriage

As a general rule, student-loan debt that is incurred prior to the marriage is not considered a marital debt, and the party who took the loan out will be solely responsible for the payment of that debt. However, student-loan debt that is incurred during the marriage presents a more difficult situation and often requires the court to apply a multi-faceted test to determine which percentage of the debt, if any, is attributable to the spouse who did not incur the debt.

Student-Loan Debt Incurred During the Marriage

Under New York case law that was decided prior to the 2015-2016 updates to the New York Domestic Relations law student-loan debt may be considered marital debt that is subject to equitable distribution, depending on all of the surrounding circumstances. However, prior to the 2015-2016 update to the New York Domestic Relations law this used to also means that the degree or professional license that was obtained through the procurement of the debt may also be subject to equitable distribution.  The updated Domestic Relations law, however, specifically changed the law to say that degrees were not subject to equitable distribution.  In one of my next blogs we will examine whether the change to the New York Domestic Relations Law about degrees being subject to equitable distribution has altered the landscape about student loan debt.

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Equitable distribution is one of the matters that I deal with most often as a divorce attorney for New York and LongIsland. Though all the intricacies involved in equitable distribution can be a concept that’s difficult to understand without a background in family law, it can become more challenging when an individual is facing the concerns of splitting unique elements, such as retirement benefits.

It’s relatively well know that the marital portions of retirement plans like 401ks, pensions and deferred compensation plans,  are typically subject to equitable distribution in the case of a divorce. However, determining the right course of action can become more complex when it comes to disability pensions. After all, the divorce lawyers and the New York courts in cases of disagreements need to determine whether the asset is one that was accumulated during the marriage and what is appropriate as far as equitable distribution, or something that should be regarded like a personal injury award. Continue reading ›

When two spouses get a divorce in New York, they must address multiple complicated issues, including the equitable distribution of marital property. This often includes the marital home. A divorce agreement, or a court order granting a divorce, usually includes provisions for the disposition of the marital home. The sale of a home might not be practical or even possible at the time of the divorce for a variety of reasons. What happens when a home is to be sold after a divorce? Should the person paying the mortgage get credit for the full amount of the payments or some other amount? As for the person waiting to receive their share of the sales proceeds, should they receive interest in some form? These questions have no easy answers, but they are worth exploring.

Section 236(B)(5)(a) of the New York Domestic Relations Law requires a court to resolve all issues of marital property distribution in, or prior to, a final judgment of divorce, except for issues regarding which the parties have entered into an agreement. Postponing the sale of a marital residence requires careful planning in the hopes of avoiding a return to court. A court is unlikely to approve the future sale of the home without both parties’ agreement, along with a plan for either selling it or otherwise disposing of one spouse’s marital property interest.

Divorcing spouses have several options when postponing the sale. One spouse may buy out the other spouse’s share of the marital interest, either in cash or with a promissory note. This arrangement, along with most other postponements, creates potential problems with a mortgage lender. Any postponed sale means that one spouse must continue making mortgage payments, while the other spouse remains liable for missed payments.

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When it comes to equitably dividing the assets that have been gathered during the course of a marriage in a divorce –retirement assets from pensions to IRAs to Annuities are important ones. Though many couples are busy fretting about who’s going to get the house or how custody agreements are going to be determined – there’s also something to be said for the importance of properly splitting retirement accounts and plans. After all, depending on the income of either spouse and the age of those spouses when the divorce takes place, retirement savings can frequently be one of the most valuable assets that any person owns. As such, we regard them as a very important matter to consider when figuring out which assets should go where for the best interests of both parties.

Unfortunately, the issue with retirement savings is that they have their own unique intricacies. These packages of money are subject to various complicated factors, such as tax implications, and this can mean that people struggle to handle them appropriately when figuring out how to divide assets. As a family lawyer, I’m left to do what I can to guide my clients carefully when they’re making decisions about financial plans and the potential options that might be available to them during the divorce.

Do You Have to Share Your Retirement Savings?

This is a question that many people have when they approach me with matters regarding the distribution of assets during a divorce.  The short answer is probably yes to the extent that the assets were earned during the marriage.  Portions of retirement assets which were earned before the marriage or after the end date of the marital estate (often the filing date of the divorce), are usually separate property and not shared on the other hand.  People often wonder whether they can avoid sharing their savings with their soon to be ex-spouse in some way. However, most of the time, if you are going through a divorce or legal separation and your spouse or you have some money sitting in retirement savings accounts, then you will be required to share these assets amongst yourselves in an equitable fashion – either through negotiation with collaborative lawyers, an agreement made in mediation, settlement negotiations or through litigation in which a decision will be made for you by the courts of New York if your case is one of the few that does not settle before the ultimate trial. In certain cases, the assets that have built up within a retirement savings account may be awarded to one single party – but this only takes place when specific circumstances are in play. Continue reading ›

Divorce and the Marital Residence

Divorces often aren’t easy. I have spent a number of years now guiding clients through the complications of divorce throughout Long Island, and New York.  I’ve seen very few cases, although they exist, where there is a big dispute over lower priced property like furniture.  Often if there is a dispute over assets it involves higher priced items like the marital residence. For most couples undergoing divorce, the biggest shared asset to consider is the family real estate, marital residence or former matrimonial home, as it is referred to in legal circles. The family home is an emotive subject, and often the largest asset to share amongst parties – though investments, businesses, savings, retirement assets and pensions could be worth more or be considerable assets too.

Although it’s possible to leave the concerns of asset distribution to a judge – I often find that this leads to dissatisfaction for both spouses involved. In most cases, it seems that couples are best served when they exercise their right to come up with personal solutions themselves.  My office gets involved with litigated matters, settlement negotiations, and alternative dispute resolution like mediation and collaborative law.

Agreeing on an Outcome

I often find that if both parties within a divorce still have a civil relationship, and would prefer to end their marriage with a simple, clean, and quick break – selling the property might be a good idea. The only issue that presents itself here is that the individuals involved will need to think about how the proceeds from the home are going to be divided between spouses. Regardless of how you choose to break up the family home, it’s important to remember that if you can agree to a solution using mediation or collaborative law, you can often find a solution that both parties can live with. If the attempt to come up with a solution outside of the courtroom fails, like through settlement negotiations between the lawyers on a case, then the judge presiding over the divorce case in New York will need to make a determination based on existing facts and laws. However, that process will remove the parties’ ability to create a better arrangement between themselves – sometimes causing both parties dissatisfaction with the outcome. Continue reading ›