An element in almost any divorce is determining how the couple will split their property when they go their separate ways. The longer two people have been married the more complicated that process can be because they have accumulated more over time. The pair can decide for themselves how to divvy up assets. If they cannot, a judge will make that decision for them.
States generally follow one of two methods in determining how property is distributed: community property or equitable distribution. New York is one of the 41 states that follow equitable distribution guidelines where the judge determines what is fair based on certain criteria. The other nine states follow community property, which is a simple 50/50 split. On the surface, that even split may appear to be the fairer way to dole out the marital estate but in many situations that is not the case.
We would argue that the fairest property distribution in a New York divorce, or any state for that matter, is the method that does not involve a judge. Many couples leave the divorce process happier when they establish a mutually acceptable agreement without the court’s intervention.
At the Law Office of Dennis R. Vetrano, Jr., LLC, we can skillfully negotiate a property settlement. If working cooperatively with your spouse is impossible, we stand ready to aggressively fight for what is in your best interests in a court of law.
Another important point is that a solid prenuptial or postnuptial agreement takes precedence over equitable distribution or community property methods. A judge would rarely override these agreements, generally only doing so if they believe one spouse was coerced.
What Is Equitable Distribution?
When a court applied equitable distribution, the judge determines what is equitable and fair. Depending on the specifics of the couple’s financial situation, equitable can mean 50/50 but not necessarily. The judge may decide to award one spouse a greater percentage. The judge will only consider marital property in the equation. Separate, personal property remains separate. We’ll explain below the difference between marital and separate property.
How a Judge Decides Equitable
To determine what is equitable and fair, the judge conducts a thorough investigation of the couple’s marital situation.
The judge will consider many factors including the following:
- Age of each spouse
- Health of each spouse
- Current and future earning potential of each spouse
- The extent each spouse contributed to acquiring marital property
- The value of each spouse’s separate property
- How each spouse supported the other’s education and earning potential
- Spousal support obligations
- Child support obligations
Having an attorney knowledgeable in New York divorce law is critical. They can argue these points on your behalf to improve the chances of a settlement that reflects your best interests.
What Is Community Property?
Like equitable distribution states, community property states look specifically at marital property. Separate property is not part of the equation. Community property states divide property equally without any consideration of other factors.
Only a handful of states follow community property:
- New Mexico
In Alaska, divorcing couples have the option to choose either equitable distribution or community property division methods.
Marital v. Separate Property
Some couples may have considerable separate, personal property before the marriage while others do not. Their ages and economic situation are often factors.
Separate property is property owned by only one spouse. Perhaps they owned a home or car before the marriage. They also could have started a retirement account prior to the union. Separate property can also be obtained during the marriage. An example of this is an inheritance given to one spouse and the gifts one spouse gives to the other. Civil lawsuits might also meet the definition if they compensated one spouse’s pain and suffering.
Marital property is generally any acquired by the couple during the marriage. Income, homes, furniture, artwork, investments, and more may be considered marital property. Even in retirement accounts started before a marriage, any additional value in those accounts after a marriage is considered marital property.
Deciding what property is marital and separate can be challenging. When a judge makes that decision, they will look at titles, statements, and other evidence to determine what is and is not marital. A spouse may need to prove that an asset is separate property and not part of property division. This is especially true when the separate and marital properties have co-mingled.
What About Dividing Debt?
Most couples do not only acquire assets. They also accumulate debt. In New York, equitable distribution also is followed in debt distribution. Judges will look at the factors previously mentioned but tax consequences and whether one spouse has wasteful behavior are examined as well.
Keep Property Decisions in Your Hands
Whenever possible, a couple should work together and with their lawyers on an agreement to divide assets and debt. This usually is the fairest distribution method because no judge can know the intricacies of a relationship like the couple themselves can. Courtrooms can get contentious, and it is impossible to predict the judge’s determination. Going to court might be the best route if you think your spouse is hiding assets or if they are abusive. Negotiation does not fit all divorces.
If you are considering a divorce, talk to one of our attorneys. They can help you think through your next steps.
To schedule a consultation, call us at (845) 605-4330 or submit our online form. We offer personalized support for each client and have the skill to handle even the most complex cases.