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How Equitable Distribution Impacts Your NY Divorce

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How Equitable Distribution Impacts Your NY Divorce

Most of the legal work and disputes in a high conflict divorce deal with asset division. Enumerating, valuing, and dividing your assets are key components of your divorce. You and your attorney will need to maximize your distribution of assets, but the distribution standards and processes are complex.

Types of Assets Divided in a Divorce

In New York state, assets are divided into two categories: marital and separate property. Marital property is nearly all the property acquired by either spouse during the marriage. These assets are divided in the divorce

Separate property includes:

  • Property each spouse brought to the marriage
  • Inheritances received during the marriage
  • Gifts received during the marriage
  • Settlements or judgments paid for personal injury lawsuits during the marriage
  • Property identified as separate property in a prenuptial agreement or postnuptial agreement

Separate property is not part of the property distribution in a divorce. 

There is a gray area for assets that are separate property but that appreciate in value during the marriage. If the increase in value is due to contributions by the non-owner spouse such as through work (such as supervising renovations or handling rentals) or financial contributions (such as paying a mortgage) then a portion of the increase in value may be considered marital property. 

Your attorney will likely spend a significant amount of time carefully examining assets to determine which category they fall into. For the best outcome, it's beneficial for as many of your assets to be characterized as separate property and for as many of your spouse's assets to be identified as marital assets. 

The gift category is particularly where intense scrutiny will be applied to ensure that you maximize your outcome. It may be to your advantage to have a variety of items such as jewelry, art, and real estate determined to be gifts made to you to shield them from distribution. The opposite may also be true, where it will benefit you if as few items as possible are determined to be gifts received by your spouse so that they can be placed in the marital asset category. 

Valuation of Assets

A key factor in asset distribution is valuation. Each asset must be valued appropriately, and this requires the use of appraisers who specialize in particular areas. Both spouses will generally hire their own appraisers who will offer their estimates to the court. Advantages to be had here have to do with seeking high appraisals of items that will go to your spouse and low appraisals of items that will go to you.

Distribution Under New York Law

States apply one of two approaches to dividing marital property in a divorce: equitable distribution and community property. Community property states take all income and assets acquired during the marriage and divide them equally between the spouses. New York is an equitable distribution state, and this means that marital property is divided in a way that is fair, but not necessarily equal. 

Determining how marital property is divided in an equitable distribution case is complex. Courts apply a variety of factors to make the distribution decision:

  • The income of the parties at the time of marriage and at the time of the divorce
  • The need of a custodial parent to remain in the marital home
  • Inheritance and pension rights either spouse will lose as a result of the divorce
  • Either party's loss of health insurance benefits due to the divorce
  • An award of spousal support made in the case
  • Contributions by one spouse to the other's education, business, or professional career such as by acting as a homemaker, parent, or wage earner
  • The liquid and non-liquid characters of marital assets
  • The probable future circumstances of both parties
  • The length of the marriage and the age and health of the parties
  • The difficulty or impossibility of evaluating a business or any part of a company and the desirability of retaining the asset free from any claims or interference by the other party
  • The tax consequences to each party
  • The wasteful dissipation of assets by either party
  • Any other factor the court finds just and proper to consider

Distribution of Debt

Assets are distributed under New York's equitable distribution law, but so are debts. Debts are evaluated in the same manner as assets and are just as important since debt distribution can offset asset distribution. First, they must be determined to be separate or marital debts. Then they must be accurately valued. The factors used by the court to divide marital assets are also used to divide marital debts. 

New York Laws

Depending on your circumstances, it may or may not be to your advantage to have your divorce case decided in New York. For example, if you are not the moneyed spouse and do not have means to support yourself after the divorce, you stand to gain more by having an equitable distribution proceeding where that factor is considered and weighed, rather than in a community property state where you will only get half no matter what your circumstances are. 

The inverse of this situation is that if your spouse has no means of support, it is to your advantage to have a divorce in a community property state (such as California) instead of New York.

You're eligible to have your divorce determined in New York if you meet one of these three situations:

  • One of you has lived in New York for two years before filing
  • You or your spouse have been living in New York for one year, and you either got married in New York, lived in New York during your marriage, or the grounds for the divorce occurred in New York
  • Both you and your spouse are residents of New York on the date of filing and the grounds for divorce happened in New York

It is worth considering the requirements and discussing the options before making a decision. Delaying the divorce to establish residency in New York or elsewhere might be beneficial to your case.

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Dror Bikel

Dror Bikel is a Manhattan-based divorce and child custody lawyer. He founded and leads Bikel and Schanfield, New York’s best-known firm for high-conflict matrimonial disputes.

As founding partner of the Manhattan-based firm, Bikel & Schanfield, LLP, Dror Bikel’s 20+ years of trial and litigation experience offers invaluable insight in facilitating settlements, mediating disputes and obtaining superior results for his clients. A recipient of the New York Super Lawyers Award, Mr. Bikel is voted among the Top 5% New York State Family Law Attorneys.

To connect with Dror: 212.682.6222 or [hidden email] or online
To learn more about Dror Bikel: drorbikel.com
To learn more about Dror's book The 1% Divorce: When Titans Clashsuttonhart.com

For media inquiries or speaking engagements: [hidden email]



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