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Equitable Distribution/Marital Property Division Equitable Distribution/Marital Property Division

Equitable Distribution/Marital Property Division

As part of the resolution of any action for divorce, spouses will either agree or the Court will order the division of marital property. In New York, the Court will divide marital property in accordance with the principles of equitable distribution. The principles of equitable distribution dictate that all marital property shall be divided fairly, but not necessarily equally.

A Court will consider sixteen factors in equitably distributing marital property:

  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, against the other party and the nature, extent, duration and impact of such act or acts; 
  15. in awarding the possession of a companion animal, the court shall consider the best interest of such animal; and 
  16. any other factor which the court shall expressly find to be just and proper.

What is Marital Property?

In New York State, what constitutes marital property is broadly construed by the Court. Any property/assets acquired (real property, retirement assets, investment accounts, business interests, savings accounts, checking accounts, jewelry, cars, etc.) during the marriage, regardless of how that property is titled is presumptively marital property and comprises the marital estate that is subject to equitable distribution. However, either party’s separate property is not part of the marital estate and not subject to equitable distribution.

What is Separate Property?

In New York State, Separate Property is, in part, any property/asset acquired by a party prior to the marriage, property acquired during the marriage by gift(s) or inheritance(s), a personal injury award, or any property acquired during the marriage with a party’s separate property, any increase in value of a party’s separate property not resulting from their active efforts. It is the burden of a party asserting a separate property claim to prove that the property in question is their separate property and not a marital asset.

Can Separate Property become Marital Property?

However, one spouse’s separate property may become marital property, in whole, or in part, during the course of a marriage through the process of commingling or transmutation. Additionally, a non-titled spouse may contribute to the increased value of the titles spouse’s separate property and be entitled to a share in that increased value.

Whether or not separate property has become marital property during the course of a marriage, or a non-titled spouse is entitled to share in the increased value of the titled spouse’s separate property, and if so to what extent, is a complex fact specific inquiry that requires a thorough and detailed analysis.

Our attorneys’ ability to undertake a comprehensive and thorough financial analysis, enables us to evaluate and determine complex marital estates that may include small businesses, investment vehicles, stock options, inheritances, pensions, retirement accounts, real property, and high-value personal property. The attorneys at Kitson Haffner & Hyde, LLP have the years of experience necessary to asses these complex issues and craft creative solutions to effectuate a division of the marital estate that meets our clients’ goals and objectives and provides our clients with the information they need to make sound decisions.