Articles Posted in Equitable Distribution

There are several options when it comes to determining what happens with the marital home in a New York divorce. Of course, the court may award the home to either party and require the party receiving the home to buy out the other spouse. A court may also order the sale of a marital residence, and divide the proceeds using the equitable distribution method. Alternatively, the court could defer the sale of a marital residence either by agreement or by order of the court.

It is not common to see a deferred sale of a marital residence when it is not be agreement. This is because a deferred sale by agreement may require the parties to co-own the house for a set period before selling the home or force the non-titled spouse to wait to receive payment for the home. This presents a host of issues, many of which may be insurmountable for a couple in the midst of a divorce. The deferred sale of a marital residence can, however, be included in a divorce settlement if sufficient thought is put into the agreement and the parties are willing to agree on certain issues.

A court can order that the sale of a marital residence be deferred, absent an agreement between the parties. Typically, a court would only do this for the sake of the couple’s children. For example, a court may consider the following when deciding whether to defer the sale of a marital home:

• The age of the children and what grade they are in;
• How long the children have lived in the home;
• The financial ability of the spouses to obtain housing; and
• The economic detriment to the spouse who would not receive the home.

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One of the most significant decisions in a New York divorce is what happens with the couple’s marital home. In most cases, a couple’s most valuable asset is their home. Aside from the financial value, there are often other considerations such as the emotional value a house has to one or both parties. In most cases, the couple can work out which party stays in the marital home and what offsets are appropriate. However, if that is the parties are not able to agree, then a judge will determine what happens with the marital home.

Usually, on my Long Island and surrounding area cases, I find that the Judge’s position is that if an agreement about the house is not made, the court will order the house sold and the proceeds divided.  Given both the financial and emotional value of a home, though, some might prefer not to sell the house unless the parties desire to do so. However, there are circumstances in which a New York divorce judge will force the sale of the marital home.  Particularly when the finances would not allow one spouse to remain in the home, a sale of the home is usually the case.

In New York divorce cases, one of the judge’s most important roles is to preserve the value of the couple’s assets. Indeed, under New York law, a judge is given broad discretion to act regarding the determination of title to the property.  Likewise, when discussing equitable distribution, if the court believes either of the parties is wastefully dissipating the couple’s assets, the court may make appropriate rulings. Thus, if retaining ownership of the marital home will result in the dissipation of the couple’s assets, the court can order the home be sold. For example, if the parties are not able to afford the mortgage payment for the marital home because the primary breadwinner in the family lost her job, the court may intervene and order that the home be sold rather than go through the foreclosure process. This is even the case if one of the spouses objects to the sale of the home.

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When a court sets out to divide a couple’s assets in a New York divorce case, the court will not simply split the assets down the middle, but instead it will employ a system called “equitable distribution.” Under an equitable distribution analysis, a court considers several factors when determining the allocation of assets. Importantly, however, only certain assets that are determined to be “marital property” are subject to equitable distribution. Thus, a party’s separate assets – i.e., those that were obtained before the marriage – will remain with the party to whom they originally belonged.

As a general matter, under the New York Domestic Relations Law, courts will consider assets that were accumulated during a marriage as marital property. Of course, certain exceptions can make the determination of what constitutes marital property fairly complex. For example, a question that often arises is how courts consider pension benefits and the provision of future health care benefits.

Pension Benefits Are Usually Subject to Equitable Distribution

The pension benefits that a party accrues while married will typically be held to be a marital asset that is subject to equitable distribution. The portion of benefits that was obtained before the marriage, however, will not be included as marital property because it was accrued before the marriage.

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