Separate vs. Marital Property in a New York Divorce

Child custody or spousal maintenance are among the most notorious aspects of divorce. However, another significant issue that couples need to be concerned about is the division of property. Each state divides property differently, so it is crucial to understand your state’s laws regarding property in divorce. In New York, married couples will want to understand the difference between separate and marital property. An attorney can explain your rights in dividing separate vs. marital property in a New York divorce.

Equitable Distribution in New York

In New York, property is not necessarily divided 50/50 in a divorce. New York uses equitable distribution, which aims to fairly divide property based on the circumstances of the marriage and divorce. Therefore, there is no communal property in a divorce in New York. Instead, there is separate and marital property. Knowing this distinction is the first step to successfully dividing property in a New York divorce.

Separate Property in New York

Separate property, according to New York law, is property that belongs to one spouse and is not shared between the two. This includes property acquired before the marriage, gifts received from others, damages received from personal injuries, or any increase in separate property value (if not influenced by the other spouse’s actions or influence).

Separate property also refers to property the spouses previously agreed would remain separate. This is commonly achieved through a prenuptial agreement, which is an official legal document outlining how property will be divided in the event of a divorce, among other financial matters.

Marital Property in New York

Any property acquired during the divorce, either by one or both spouses, is considered marital property unless it falls under any of the separate property exceptions mentioned. However, some separate property can become marital property in certain circumstances.

For instance, if one spouse acquired a classic car before the marriage, it would be theirs, including any appreciation in value. However, if the other spouse paid for or performed repairs on the vehicle, which resulted in an appreciation in value, that value would be considered marital property.

Separate property can also become marital property by choice of the couple or by actions of the couple. For example, when one bank account began as one spouse’s and was transferred to a joint account over time, this could make the assets within the account marital property.

How Is the Distribution of Property Decided?

Spouses can agree on how their property is divided if they choose. This can be done by a prenuptial agreement. However, if the couple does not have one, they can still create a separation agreement that will include details on how property will be divided, as well as other divorce matters.

In order to create an accurate agreement, spouses will have to determine the value of the property they are dividing. This can save time and money by avoiding court. In some cases, an appraiser might be needed to determine the accurate value of some assets.

If the couple cannot agree on the distribution of property, a judge can review the case and make these decisions for them. In New York, the judge must consider the circumstances of the case. Some things the judge will consider include:

• The income of each spouse during the marriage and at the time of divorce.
• The earning potential of each spouse.
• The age of each spouse.
• Any health conditions either spouse may have.
• Contributions of each spouse, including financial contributions to the household, homemaking contributions to the household, and contributions to the other’s business ventures.
• The presence of any domestic violence.
• Whether or not a property can be exchanged for cash, and if so, how easily it would be to do so.
• Any spousal maintenance awarded to either spouse.

A judge will consider all these issues and more when determining how to divide property. Generally speaking, a judge will aim to do what is both equitable and practical. For instance, if one spouse owns their own private medical practice, it is unlikely the other spouse will be awarded a portion of it if they do not have medical knowledge or experience. However, the judge may look for other ways to make it financially equitable.

FAQs

Q: How Is Property Divided in a Divorce in New York?

A: Property is divided in New York based on equitable distribution. This means that all property will not necessarily be divided equally (50/50 split) between couples. The judge will seek to divide property based on the appropriate circumstances surrounding the divorce and by taking the details of their marriage into account.

Q: Are Separate Bank Accounts Marital Property in New York?

A: Separate bank accounts can be either separate or marital property in New York based on the circumstances of how the account was acquired and maintained. If the account was started prior to the marriage or was gifted or inherited by one spouse during the marriage, it will generally be separate. On the other hand, if one spouse made deposits into the other spouse’s account or if the account was used for joint expenses, it can be considered marital property.

Q: How Can I Protect My Separate Property in a Marriage?

A: The easiest way to protect your separate property in a marriage is to create a prenuptial agreement between you and your spouse prior to getting married, where you discuss property and how it should be divided in the event of a divorce. If this is not possible, keep your property separate and do not commingle it, as this could make it become marital property.

Q: Are Debts Considered Marital Property in New York?

A: In New York, debts can be considered marital property. Debts are handled similarly to property and other assets. If the debt was acquired before the marriage, it will generally be considered a separate debt. If the debt was acquired within the marriage and/or used for the family’s benefit (such as taking out a loan to perform home renovations), it will generally be considered a marital debt.

Contact Trotto Law Firm, P.C., Today

If you or someone you know is going through a divorce and has property to be divided, Trotto Law Firm P.C. can help. Contact us today for more information.