How Property is Divided in a New York Divorce
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A common misconception about how property is divided in a New York divorce is that everything will be divided equally. This is not exactly true as New York is an equitable distribution state. This means that property is divided in a way that the court deems “most fair” to both sides, and what is “fair” is not always 50/50.
There are two ways property is categorized: Marital and Separate.
Separate Property
Separate property is property that is owned by one party alone. Typically it is acquired before the marriage but not always.
In NY separate property is:
Property acquired before marriage
Inheritance
Gifts from someone other than the spouse
Compensation for personal injuries
Property acquired from other separate property (you sell a house you owned before the marriage and buy a new one with money)
Property described as separate property by written agreement of the parties, such as a prenuptial or postnuptial agreement.
Marital Property
Marital property is all property acquired by either or both spouses during the marriage.
Marital property includes:
Property you and your spouse bought during the marriage (except for any contributions of your separate property you may have made to such property). This includes real property and personal property, like vehicles, furniture, artwork, etc
Income, cash, securities, bank accounts, retirement accounts and pensions acquired during the marriage
Gifts to each other.
Can separate property become marital?
With the exception of real estate, such as the marital residence, if you mix or commingle your separate property with marital property, the court may consider part or all of your separate property to be marital property, and divide it up with your spouse.
Examples of ways separate property may become marital:
You get an inheritance and deposit it in a joint bank account
You own an apartment from before the marriage. Your spouse does renovations that greatly improve the value. Your spouse may be entitled to a marital portion of the increase in value.
You add your spouses name to a bank account that held separate funds
Note that even if something acquired during the marriage is in your name only, it does not automatically make it separate property.
How does the court decide how to divide marital assets?
Some of the factors the court may consider include:
(1) the income and property of each party at the time of marriage, and at the time of the commencement of the action;
(2) the duration of the marriage and the age and health of both parties;
(3) the need of a custodial parent to occupy or own the marital residence and to use or own its household effects;
(4) the loss of inheritance and pension rights upon dissolution of the marriage as of the date of dissolution;
(5) the loss of health insurance benefits upon dissolution of the marriage;
(6) any award of maintenance under subdivision six of this part;
(7) any equitable claim to, interest in, or direct or indirect contribution made to the acquisition of such marital property by the party not having title, including joint efforts or expenditures and contributions and services as a spouse, parent, wage earner and homemaker, and to the career or career potential of the other party. The court shall not consider as marital property subject to distribution the value of a spouse's enhanced earning capacity arising from a license, degree, celebrity goodwill, or career enhancement. However, in arriving at an equitable division of marital property, the court shall consider the direct or indirect contributions to the development during the marriage of the enhanced earning capacity of the other spouse;
(8) the liquid or non-liquid character of all marital property;
(9) the probable future financial circumstances of each party;
(10) the impossibility or difficulty of evaluating any component asset or any interest in a business, corporation or profession, and the economic desirability of retaining such asset or interest intact and free from any claim or interference by the other party;
(11) the tax consequences to each party;
(12) the wasteful dissipation of assets by either spouse;
(13) any transfer or encumbrance made in contemplation of a matrimonial action without fair consideration;
(14) whether either party has committed an act or acts of domestic violence, as described in [Social Services Law §459-a] against the other party and the nature, extent, duration, and impact of such act or acts;
(15) any other factor which the court shall expressly find to be just and proper.
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