In New York, marital property is divided between spouses under the law known as equitable distribution. The term “equitable” means “fair” and an equitable distribution of marital property does not always mean an equal one.
Equitable distribution of marital property is implemented by identifying what the assets and liabilities are as of the date the divorce action starts; classifying those assets and liabilities as marital or separate property; determining the value(s) of the marital property; and then ultimately distributing those assets and liabilities, or their value, as between the spouses.
Marital property comprises all property acquired during the marriage regardless of who holds title. However, not all property is marital property. Rather, some property is known as a party’s “separate property.” Separate property is defined as:
- Property acquired before marriage;
- Property acquired by bequest, devise, or descent (i.e., inheritances) or as a gift from a party other than the spouse, even if acquired during the marriage;
- Compensation for personal injuries, even if acquired during the marriage; and
- Property acquired in exchange for, or the increase in value of, separate property, except to the extent that such appreciation occurs during the marriage and is due in part to the contributions or efforts of the other spouse.
Experts may be retained to value certain assets. Typically, real estate, businesses, and pensions are valued by experts.
Courts have the power to equitably distribute marital property based upon the following factors:
- the income and property of each party at the time of marriage, and at the time of the commencement of the action;
- the duration of the marriage and the age and health of both parties;
- the need of a custodial parent to occupy or own the marital residence and to use or own the household effects;
- the loss of inheritance and pension rights upon dissolution of the marriage as of the date of dissolution;
- the loss of health insurance benefits upon dissolution of the marriage;
- any award of maintenance (post-divorce);
- 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;
- the liquid or non-liquid character of all marital property;
- the probable future financial circumstances of each party;
- the impossibility or difficulty of evaluating any component asset or any interest in a business, corporate or profession, and the economic desirability of retaining such asset or interest intact and free from any claim or interference by the other party;
- the tax consequences to each party;
- the wasteful dissipation of assets by either spouse;
- any transfer or encumbrance made in contemplation of a matrimonial action without fair consideration; and
- any other factor which the court shall expressly find to be just and proper.