Division of Assets

New York is an equitable distribution state, meaning the marital property is divided fairly but not necessarily equally. Either party to a divorce can ask the court for the equitable distribution of marital property during the divorce action. If the couple has a separation agreement or pre-nuptial or post-nuptial agreement, then the couple can opt out of equitable distribution.

Economic Partnership

One aspect of marriage is the economic partnership that has occurred between the husband and wife, including but not limited to, the financial contributions of each spouse and the intangible contributions of each spouse during the marriage.

Factors Considered in NYC Divorces

There are twelve factors that judges are required to consider in determining the equitable distribution of the marital property. These are:

1. Income and property of each party at the time of marriage and at the time of the divorce action
2. Duration of the marriage
3. Age and health of both parties
4. Needs of the custodial parent to occupy the marital residence and to use the household effects
5. The loss of inheritance and pension rights upon dissolution of marriage
6. Maintenance (alimony)
7. Equitable claim to, interest in or direct/indirect contribution made to acquisition of marital property by the party not having title
8. The liquid or non-liquid character of all marital property
9. Probable future earnings of each party
10. Difficulty or impossibility of evaluating any component asset or any interest in a business, corporation, profession and the economic desirability of retaining such an asset or interest free of any claim or interference by the other party
11. Tax consequences
12. Wasteful dissipation of assets by either spouse and any transfer or encumbrance made in contemplation of a matrimonial action without fair consideration

Domestic Relations Law, Section 236, Part B allows a court to weigh any other factor which the court shall expressly find to be just and proper. By and large, the equitable distribution system means that marital misconduct usually will not impact how marital assets are to be distributed, unless the fault is egregious and the misconduct shocks the conscience of the court.

Other Types of Property

Finally, property can include anything that is owned or possessed, and it includes intellectual property, such as copyrights, patents and/or trademarks, a contingent interest, which means something that may come into being if an events occurs that is possible but not a sure thing, and a vested interest in trust, which is a benefit to which a person has an assured right, although the benefit may not be paid until some future time. Virtually any tangible or intangible asset from which a profit can be made or income derived if a form of property.

Disclosure of Assets

It is obviously important in the equitable distribution system for each spouse to produce a “Statement of Net Worth”, wherein each spouse has to disclose all of their financial interests.

Also, because a divorce action can go on for a long time, a party can file for what is called a “pendent elite motion”, which is used to make sure that assets are not transferred or dissipated during the marital action.

Identifying Marital Property

The equitable distribution focuses on the marital property, meaning the property obtained while the parties were married. Separate property (not separation property) is property that was acquired before the marriage and property acquired through inheritance or gift from someone other than the spouse. This is not to be confused with wedding gifts, which of course are marital property.

There are many gray areas when it comes to equitable distribution as to how property obtained before the marriage but contributed to by both spouses during the marriage is going to be treated and how all of the marital property is going to be valued. Also, it is easy for a bank account to be split between the parties, but what if there is a marital home that one spouse is going to remain living in with a child or children of the marriage? The court is probably not going to force the custodial parent to sell the property as it may be in the best interest of the child to remain there, yet the other spouse may be entitled to a 50 percent split on the value of the property. The court will have to address this and other similar issues in deciding the distribution. The same type of thing will occur with a pension fund or retirement fund.