New York City divorce is anything but typical.
With its cultural diversity, wide socioeconomic range and distinct occupations, New York City divorce is in a realm of its own. High net worth New York City families face challenging asset valuation and equitable distribution obstacles. New York City business owners must seek the most favorable business valuation.
Divergent religious beliefs, frequent international travel and disparate social customs of New York City’s intercultural marriages present their own child custody, visitation and spousal support difficulties.
New York City costs of living can be 27% and much more above the national average. Child support is capped, and private schools for special needs children can cost upwards of $50,000 per year per child. Manhattan “middle-class” make between $80,000 and $235,000. Even families with combined incomes of $1 million or more can have difficulty making ends meet without adequate support when incomes are split.
Your personal and financial future is worth protecting, and preparation is key. Whether you are considering or currently involved in a New York City divorce, understanding how to avoid New York City divorce pitfalls could save you money, even earn you money, in the long run.
New York City Divorce Rates
Around 50% of the over 2.1 million U.S. marriages will eventually end in divorce, with around 43% of marriages ending within 15 years. Around seven out of every 1,000 Americans marry each year, while around three out of every 1,000 Americans are divorced. So how does New York city measure up?
Manhattan divorce ranks highest in the state with 6.35 divorces per 1,000 people in 2015, with the Bronx (3.68) and Queens (2.51) following in second and third place. Brooklyn holds the lowest per-capita divorce rate in New York state with 1.41 divorces per 1,000 people in 2015. Hudson Valley and Long Island per-capita divorce rates hovered between 1.9 and 2.9 in 2015.
New York City divorce filings fell 7% from 2015 (29,769) to 2016 (27,614), according to data from the New York Office of Court Administration. Numbers of divorce filings decreased slightly in Manhattan, Queens and Brooklyn, but numbers increased slightly in Staten Island and the Bronx from 2015 to 2016.
Four Factors Influencing a New York City Divorce
As a New York matrimonial and family law trial attorney and litigator with over two decades of trial and litigation experience, I have seen the same set of issues impact divorcing New York couples again and again. New York City is unique in a variety of ways, but four specific characteristics of the city set it apart and continually affect the outcome of New York City divorces and the potential for future success of both partners. Those four factors are:
- Socioeconomic Diversity
- Industry Diversity
- Asset category Diversity
- Cultural Diversity
New York State has the highest degree of income disparity in the U.S. (Gini coefficient of 0.5). Average median household incomes range from $23,000 in Coney Island to over $370,000 in Lenox Hill. As of 2017, New York City houses more billionaires than any city in the world, 82 with a combined net worth of $398 billion.
At the same time, Manhattan houses some of the lowest income families in the nation. Recent data from the Association for Neighborhood & Housing Development shows that nearly 60% of New Yorkers don't have enough savings to cover three months of living expenses.
||Avg. Household Income
|Upper East Side
And on the lower end of the spectrum…
||Avg. Household Income
Because one partner is usually more of a breadwinner than another, when a combined household income is broken into two separate incomes, and these two separate individuals have to pay their own rent or mortgage, things can become impossible to afford for one or both partners.
While a spouse getting divorced in an equal income environment would have little trouble finding a new home near the children’s’ school, friends and family, a spouse getting divorced in New York City is facing moving hours away or to an extremely impoverished area to be able to afford to live.
Splitting up incomes can make living in New York City a near impossibility without adequate support.
New York City is considered the financial, media and cultural capital of the world. Careers in education, technology, sports, entertainment, politics and research are common and significantly impact U.S. and global commerce.
Numerous multinational and Fortune 500 corporations are headquartered in New York City. Real estate is a big business in New York City, which houses some of the world’s most valuable property on Park Avenue, Madison Avenue and Fifth Avenue in midtown Manhattan (some spots renting for $3,000 per square foot).
New York City also serves as headquarters for the nation’s financial industry. New York City is the principal commercial banking center of the U.S., and a major player in private equity, hedge fund management, and mergers and acquisitions. New York City’s securities industry accounts for 6% of the city’s private sector jobs.
Biotechnology and academic scientific research are big in New York City, with Cornell Tech on Roosevelt Island, the Alexandria Center for Life Science and the New York City Economic Development Corporation's Early Stage Life Sciences Funding Initiative.
Silicon Alley, based in Manhattan, Queens and Brooklyn, houses a wide array of leading high technology industries involved in digital media, telecommunications, software development, game development and financial technology supported by entrepreneurs and venture capital investments.
Our clients include occupational therapists, hedge fund managers, risk assessment officers, state and federal government agents, police officers, Department of Defense contractors, technology experts, Uber drivers, deli owners and people in real estate. Many of our clients are artists, people in the Gallery, Soho, the downtown scene. From a business valuation perspective, an experienced New York divorce lawyer must understand how to achieve the optimal outcome for their client as related to each of these specific professions.
From art galleries to law offices, how you chose to value a business ultimately determines the outcome of your divorce. For example, in valuing a cash business like a deli, you will basically need an accountant standing at the cash register counting dollar bills, because cash business is not reported.
Consider sports contracts. The salary is valued as income, however there may also be royalties and marketing to consider as an income stream. If the incomes stream lasts a long time, all the way into post-retirement, we must set a present-day value to it. How this value is set can vary widely depending on the valuation method used. The difference can be millions of dollars.
For New York artists, income is based on tax returns. However, tax returns don’t always tell the whole story. Some people will intentionally defer. Some people will quit their job right before a divorce and you have to impute income.
Divorces involving Wall Street finance experts must consider the all-important annual bonus when negotiating a divorce. Millennial entrepreneurs must consider intellectual property and what it is worth today versus what it will be worth tomorrow.
Some New York City professions require special attention to privacy needs. For high-profile individuals like celebrities, performers, painters, musicians, corporate executives, athletes and artists, discretion in divorce can be critical to one’s career – and can be difficult to maintain without the proper legal resources.
In addition, there may be value placed on a celebrity’s personal brand, or value of a celebrity-spouse brand. This value must be considered when negotiating the aspects of a divorce.
Asset Category Diversity
With the wide variety of New York incomes and industries comes an equally broad range of assets. As a New York divorce lawyer, I have worked with clients who own everything from multiple vacation homes to restaurants to highly valued works of art.
Assets and their proper valuation are a major factor in New York divorce negotiations.
High-income families who own significant amounts of real and intangible property require guidance in the classification and valuation of both marital assets and separate property.
When billionaire level incomes are involved, you are often dealing with highly unique valuation issues with widespread assets, plus perhaps a team of tax accountants hired to make everything seem like it’s losing money. Some of the asset types we deal with on a regular basis include:
- Appreciated Property
- Business or Corporate Assets
- Commercial Property
- Gifts / Inheritance
- Hegde Funds / Stock Options
- Income Property
- Intellectual Property
- Investment Assets
- Legal Practices
- Medical / Dental Practices
- Out of State or Country Property
- Overseas Accounts
- Pensions / Retirement Plans / 401(k)
- Premarital Property
- Residential Property
- Vacation Property
Under New York Consolidated Statutes, Domestic Relations Article 13, § 236 (B), New York is an equitable distribution state.
This means either both parties agree to the property division on their own or the court decides how to divide the marital property fairly. In making this decision, the court defines separate versus marital property, examines what each spouse contributed to the marital property and calculates what each spouse will need to maintain a minimal standard of living after the divorce.
In equitable distribution of property, the court considers several factors, including:
- Length of Marriage
- Potential Earnings
- Potential Losses
- Property Owned
- Prenuptial Agreement
- Contributions to Property Value
- Health Insurance Policies
- Inheritance Rights
- Pension Rights
In New York, marital property is any property earned or acquired during the marriage.
Non-marital property includes any property acquired before the marriage, or any gifts, inheritance or property delivered to one spouse only during the marriage. Prenuptial agreements may exclude certain property from the marital estate.
In some cases, if your spouse contributes to an increase in the value of your separate property, that property may become marital property.
While the court divides only the marital property during divorce, it will usually consider both marital and separate financial property in calculating alimony and spousal maintenance. In dividing business interests, business assets acquired before marriage may be considered separate property.
However, business appreciation during the marriage may be considered marital property if both parties worked in the business or supported it in some way, even if indirectly, such as by raising children. The court may order a payment to equalize any uneven business or property distribution.
Before dividing assets, you or the court must determine the value of your assets. Typically, asset valuation involves, (1) determining the valuation date and (2) assigning a dollar value to each asset according to that date. For each asset type, there are several different appraisal methodologies that may be used – all with different outcomes that may be more or less beneficial to you.
Some assets may be best valued using the capitalization method. Others may require a market value approach or an asset-based valuation.
An expert forensic accountant can decide which method to apply to value an asset and which multiple to apply (multiple differentials may be worth $1 million or more). At the same time, expert legal advocates will ensure you comply with federal Employment Retirement Income Security Act of 1974 (ERISA) laws and fracturing deferred compensation in furtherance of a divorce.
Consider real estate.
Many New Yorkers own apartments, commercial buildings, land, income property like skyscrapers (or a percent or a partnership that owns a skyscraper). Some families own three homes in the Bronx or a separate small residence in Staten Island.
When your legal team assigns a value to these forms of real estate for property distribution in divorce, every aspect of the property must be accounted for. There are different types of debt on the property. There are mortgages, second mortgages and home equity loans. Properties may be liened by tax authorities or pledged against personal loans.
Your legal team must understand the ins and outs of how New York real estate works and how it appreciates.
Does real estate appreciate because of market forces or because people are putting effort into making it worth more? Are you putting money in renovations or combining properties?
There is a difference.
When a spouse invests in active labor, the property becomes marital property. If the property value is only affected by market forces and was owned prior to the marriage, then you are dealing with passive appreciation and non-marital property.
In finance, valuators and legal teams must be familiar with a wide variety of securities products, debt products, commodities, deferred stock – and when they vest. There are different types of retirement accounts to consider, including government 403(b)s, 401(k)s, vested retirement accounts, defined pension plans and undefined pension plans.
Asset division in divorce can become complicated without an experienced New York matrimonial and family law attorney who has an extensive understanding of equitable asset distribution to help guide your decisions.
The best way to ensure that your assets are optimally divided and valued is to hire a legal team with a panel of expert forensic accountants, valuators, art appraisers, real estate appraisers and other specialists who understand the appropriate appraisal methodologies to use for each specific asset type.
New York City is one of the most culturally diverse cities in the nation. More than 36% of New York City residents are foreign-born (over 3 million), according to recent data from the New York City Department of City Planning.
New York City is the most linguistically diverse city in the world, with up to 800 languages spoken in Queens alone, and contains more foreign-born citizens than any city in the world, the majority being West Indian, Chinese, Dominican, South American, Mexican, Asian Indian, Jamaican, Ecuadorian, Central American and Russian.
According to the American Community Survey, 28%% of New York City residents are Hispanics and Latinos, made up of Puerto Ricans (9.4%), Mexicans (3.6%), Cubans (0.5%) and 14% other. New York City’s Lower East Side (Loisaida), Spanish Harlem and Williamsburg, Brooklyn, Staten Island’s North Shore and the Bronx contain the world’s largest Puerto Rican population outside of Puerto Rico.
New York City contains the world’s second largest Jewish community (next to Israel), the largest Italian American population in the nation and a significant Asian Indian population. More than 40% of the nation’s Bengali’s reside in New York City. The New York metro also contains the largest population of Arab and Middle Eastern U.S. residents.
The city also houses the largest number of Chinese outside of Asia. Over 6% of NYC residents are of Chinese decent and the city currently includes nine established Chinatowns (Manhattan, Queens, Flushing, Sunset Park, Avenue U, Bensonhurst, Edison, New Jersey, Long Island). Around 40% of Chinese New Yorkers live in Queens.
According to the 2014 American Community Survey, New York City contains 24% of all Indian Americans, originating from India, Pakistan, Bangladesh and Sri Lanka. New York City contains the largest Sri Lankan population in the U.S. Little Sri Lanka in Tompkinsville, Staten Island is one of the largest Sri Lankan communities outside of Sri Lanka.
The majority of Indian Americans reside in Queens, specifically Bellerose, City Line, Elmhurst, Floral Park, Flushing, Glen Oaks, Jackson Heights, Jamaica, Kew Gardens and Ozone Park.
NYC also contains 16% of all Korean Americans, at 1.3% of the New York City population. Approximately 67% of the city’s Koreans live in Queens. Numerous Italian Americans, Irish, Greeks and Germans also reside in New York City after the large, mid-19th century and early 20th century emigrations.
New York City has the largest population of Italian Americans in North America and the third largest Italian population outside of Italy, most residing in Manhattan, Brooklyn, Queens, the Bronx and Staten Island.
Most of New York’s Polish immigrants and Polish-Americans live in Brooklyn (Greenpoint / Williamsburg) and Queens (Maspeth / Ridgewood). New York City also contains the largest Romanian-American community in North America, mainly located in Queens, Manhattan and Staten Island. There are also many Russian-Jews in the city, most located in Southern Brooklyn’s Little Odessa.
Along with this rich diversity in geographical origin comes an equally rich diversity in religious practices.
According to the Pew Research Center’s 2014 Religious Landscape Study, Catholicism is the most practiced religion in the city (33%), followed by Christianity (26%) and Judaism (14%). Buddhists, Hindus, Sikhs and Islamics make up a majority of the remaining religions, with 24% of New Yorker’s claiming no religious affiliation.
New York City’s unique cultural diversity brings with it a rare dynamic to divorce. Marriages between New Yorkers of different ethnicities, faiths and customs are common. And while these marriages can seem exotic and exciting in the beginning, the challenges that intercultural couples face can soon lead to some serious problems.
Issues arise from disagreements around everything from religious practices to customs regarding personal space, conversational styles and social habits. In-laws from different cultures may feel that the partner is a bad influence on their child and teaching their grandchildren the wrong ways.
Intercultural couples may ﬁnd it difﬁcult to understand and communicate their conﬂicts in a way that cultivates effective solutions.
Partners from different cultures may face financial challenges over who should earn the money, who should spend the money and what purchases are appropriate. Should they be saving for their child’s college tuition, or sending money to help extended family? Should they be tithing 10% of their income to the church, or purchasing a nice home, cars and belongings to impress friends, family and coworkers?
Some cultures practice functional medicine, diet and holistics, while others want to visit the pediatrician every three months and do what he says. Many eastern cultures would opt for functional medicine and don’t want to give their child vaccines. Disparate belief systems like these can affect custody cases.
While one spouse was never bothered by not taking their child to the doctor, during divorce they may claim that their partner was abusing their child by not taking them to the doctor.
Certain cultures believe that allowing the child to sleep in their bed is normal and acceptable, or that using the bathroom or walking around naked in front of the children is fine. Certain cultures feel that spanking is an important and effective disciplinary measure. A partner who doesn’t believe these things may claim their spouse is abusing their children by practicing them in order to gain custody.
Intercultural marriages are in no way doomed to divorce. Of course, achieving a successful balance requires patience and compromise.
When divorce does become a discussion in an intercultural marriage, it is vital that the parties work closely with a divorce lawyer who has experience handling intercultural challenges to ensure you get a fair and beneficial outcome.
New York City Spousal Support and Maintenance Issues
New York City’s unique socioeconomic diversity, industry diversity and asset class diversity make New York spousal support onerous.
The cost of real estate in New York City is the highest in the nation. In many cases, a family of four in Manhattan’s upper east side must live in a two-bedroom apartment that costs $3,000 to $5,000 per month on a combined income of $250,000 per year. The children must share a bedroom or convert the dining room into a makeshift third bedroom.
That can work just fine for a New York family that earns $500,000 or less. But once they separate, the partner leaving the apartment generally can’t afford an apartment of the same size. New York City rents are just too high. What a family can squeak by with as a combined-income unit, they simply can’t accomplish once separated.
The cost of real estate puts the payor of child support in a real bind.
Mom doesn’t want to move away from her friends, the school and the pediatrician around the corner. Dad has to pay support which, with two kids, is 25% of his gross salary. There is no way he can afford a two-bedroom rental on the upper east side. Therefore, Dad has to relocate to east Harlem, Brooklyn or Queens. Legal guidance in spousal support negotiations are vital to a beneficial New York City divorce outcome.
New York City prenuptial agreements can affect both alimony and child custody.
Consider a husband who comes from a wealthy family. His parents want to offer him a significant amount of money to purchase a house, but don’t want the money to leave the family if things go south.
The parents ask their son to draw up a prenuptial agreement specifying that any item purchased with family money stays with the son. The husband asks his wife to sign a prenup that says upon separation, the wife will vacate their Manhattan apartment (purchased with his family’s money) within 90 days.
If the wife has paid for a portion of the mortgage, or for renovations to the apartment, the Manhattan property may be considered marital property. Perhaps the apartment was purchased in full by the husband with his parents’ money.
But now, eight years later, the couple has three children who attend expensive local Manhattan schools like Browning and York. The husband works, while mom stays at home. Yet, according to the prenup, the wife must vacate the home. Will the court uproot the children from their schools if mom obtains custody? How will the mother afford a local residence?
These are significant issues that we deal with regularly in New York City divorce.
New York City Child Custody Issues
Families living in New York City face a number of unique divorce challenges that must be addressed when child custody is involved, namely, the New York cap on child support, international travel issues and paying for special needs education.
New York Child Support Cap
The New York Child Support Standards Act (CSSA) places a $141,000 cap on combined income for the purposes of child support calculation. This $141,000 amount is excruciatingly low for couples living in New York City, but was determined based on the incomes of the entire state of New York, including small rural towns where the incomes are much lower like Troy or Syracuse.
This makes it almost impossible for those who live in New York City to maintain the same lifestyle after divorce.
When the parents’ combined income exceeds the $141,000 per year cap, it is crucial that the divorce lawyer is able to communicate to the court why additional support is or is not required using the income amount above the cap. New York courts will consider several factors when deciding whether to and how much to exceed the $141,000 cap on child support under the New York Domestic Relations Law, including:
- Financial Resources of Custodial Parent
- Tax Consequences of Increased Support
- Special Needs of the Child
- Non-Financial Child Care Contributions of Each Parent
- Significant Lifestyle Disruption
- Educational Requirements of Each Parent
- Outside Child Support
Our Manhattan-based matrimonial and family law firm recently achieved the highest cap record to date at $800,000. Achieving a workable child support amount is certainly possible with the right legal advocates working on your behalf.
Parental child abduction is the most common type of child abduction in the U.S., occurring most often when parents decide to separate or divorce. International abduction is a particular concern among intercultural couples who frequently visit family and friends in other countries.
While trips to the grandparents’ house in Brazil may have been a common family event throughout the marriage, a divorcing partner may decide international travel with the children should now stop. Parents fear the child will not be returned after a visit to a foreign country, and challenges involving international jurisdictions can make recovery of an abducted child difficult.
While the Hague Convention on the Civil Aspects of International Child Abduction stands as a legal tool for recovering abducted children (under age 16) from foreign countries, not all countries are signators. And some countries that are signators often don’t enforce the treaties.
The 2016 U.S. Department of State Bureau of Consulate Affairs Annual Report on International Parental Child Abduction declared Argentina, The Bahamas, Brazil, Colombia, Costa Rica, Dominican Republic, Ecuador, Guatemala, Honduras, Peru and Romania as "countries demonstrating a pattern of noncompliance” with the Hague Child Abduction Treaty. Negotiating child visitation and travel arrangements is important for families who travel abroad.
Children with Special Needs
Paying for private school becomes a major matter of contention in New York divorce.
The New York Department of Education is required to provide an education to every child. In some cases, the child has challenges that cannot be properly addressed in a public school, like ADD, dyslexia or expressive receptive issues, even when the school provides a personal assistant for the child. If a public school cannot address the challenges, New York has to pay for the private education of the child.
For the state to pay for private school, parents must go through an administrative process, often including a hearing with the Department of Education that includes medical doctor testimony. When one or both parents feel a child must attend a special needs private school, and the city disagrees due to lack of medical diagnosis or support, the parents must pay for that private school themselves.
Private school in Manhattan can cost between $45,000 and $66,000 per child per year. Even for Manhattan families with combined incomes of $1 million per year, the cost of three children in private school, plus a mortgage, a vacation home in the Hamptons, a full-time nanny and housekeeping can leave zero money left over.
Issues arise when one spouse identifies a learning challenge in a child and the other spouse then doesn’t feel that private school is necessary. Parents may argue over the expense of sending their child to a private school. One party may contest the level of challenge the child may have - whether it is on the spectrum, ADHD or dyslexic - because that party doesn’t want to pay.
An experienced New York City divorce lawyer will be familiar with these issues and be able to guide you in the right direction.
How to Choose a New York City Divorce Lawyer
Divorce negotiations and agreements can affect an individual and their children for the rest of their lives. Without an experienced New York City divorce attorney on your side who understands how to communicate your side of the story, divorce court can do more harm than good.
The role of a New York City divorce attorney is to protect your interests and ensure that negotiations – whether through personal agreement, mediation or court – provide the best possible outcome.
Because of the unique aspects of New York divorce, the best New York City divorce attorney will have 20+ years of trial and litigation experience in cases specifically involving New York City custody, child and spousal support and equitable distribution - and will want to impart that valuable knowledge to their client.
Your New York City divorce attorney must have dexterity in multiple aspects of matrimonial and family law, including experience dealing with couples involved in the various industries across New York, both high-income and lesser-income families, and the proper valuation of a wide variety of asset classes.
Intercultural couples must consult with a New York City divorce attorney who has experience with the wide variety of cultural backgrounds found in New York City. Parents with special-needs children and unique support and custody issues are advised to choose their divorce attorney according to his or her experience level in these areas.
Your New York City divorce attorney should have the experience, skills and resources required to aggressively advocate and frame your case to obtain the best possible result throughout the entire litigation process and trial.
Even if you do not plan to take your case through trial, New York divorces can get messy during negotiation.
You want to choose a lawyer who will be able to represent you through the entire process.
Your New York divorce lawyer should also show a demonstrated ability to resolve cases. The best New York divorce lawyers have the skill to think creatively on how to resolve each issue, should you opt to settle matters outside of the courtroom.
Equally as important, New Yorkers going through divorce will want to choose a divorce lawyer who is honest, who you have a good rapport with and that you know you can trust.
Even if you haven’t officially decided to divorce, but are separating or considering divorce for the future, a free consultation with an experienced New York City attorney who specializes in matrimonial and family law trial and litigation can give you invaluable advice on how to best deal with your situation.
If you or someone you know is considering or involved in divorce, our Manhattan-based matrimonial and family law trial attorneys at Bikel Rosenthal & Schanfield, LLP will work to obtain the optimal outcome possible for your case. We represent individuals located in New York City and across New York State.
Call us today for a free, confidential discussion of your options. 212.682.6222 or CONNECT ONLINE