Equitable Distribution of Marital Property and Debt

One of the most important aspects of a divorce is the division of property accumulated during a marriage. At first glance that may seem like an easy task. However, not all property is subject to division, and identifying, locating and valuing property can be daunting. 

If there is property in your marriage, whether you believe you are entitled to it or not,   you should seek the advice of the of an experienced divorce attorney to assist you in determining your rights. For instance, you should know what property you are entitled to keep and what you have to divide with your spouse.  In addition, you should also know who will be responsible for the debt accumulated during the marriage as that too is subject to division between spouses.

 Even if an asset is titled solely in one spouse’s name, or owned prior to the marriage,  the other spouse is not precluded from making a claim to such property so long as is ultimately considered marital property under the law.

 At the Law offices of David Smoren, PLLC we have successfully fought  for the property right of clients and handled all aspects of property division within a divorce proceeding.

Call us today at 718 225-6700 for a free phone consultation, or to arrange for a comprehensive office consultation to discuss your options or simply post a comment or question on the contact form.

Equitable Distribution – The Basics 

New York is an equitable distribution state. In other words, the marital property will be divided between spouses in a fashion that is equitable, or fair. The court determines what is equitable based on comparing competing facts to the law. These facts can include the value of a specific asset and each spouse’s contribution to same.    Based upon such comparison the court will decide the value of the assets and fashion a division that it deems fair and equitable.

Equitable distribution is confined to the division of marital assets and debts acquired during the marriage. However, that does not mean that all property acquired by a spouse prior to the marriage is considered separate property and exempt from division. There are many occasions when an asset, although purchased or obtained prior to the marriage, can be considered marital property subject to division.  These instances typically occur when there is an increase in value of such pre-marital property during the marriage that can be attributed to one or both spouse’s efforts during the marriage. The division of such premarital property will typically be limited to the increased value during the marriage. Premarital property that increases in value during the marriage solely due to market forces will typically not be considered property subject to division.

Unless the parties can agree on the division of assets pursuant to a written agreement, the court will decide what is marital property, what is separate property and who gets what. Equitable distribution does not necessarily mean a 50/50 division of the assets. Property will be divided and distributed after careful consideration of the case specific facts and the statutory factors that comprise the Equitable Distribution Law. Most courts will take the position that the longer the marriage, the more inclined they are to divide the assets equally. 

Factors Considered in Dividing Property

The types of property commonly divided at divorce are real property like the family home, personal property like jewelry, and intangible property like income, benefits, and debts. The court treats debts the same as any other real, personal, or intangible property. Before dividing an asset or debt, the court will have to characterize it as either marital or separate, determine its value and then assign ownership or responsibility for it based on a set of factors designed to give an equitable result. It must be noted that the court is not acting alone in its determination; it relies heavily on the respective parties and each spouse’s attorney to provide specific property valuations and to otherwise advocate their client’s respective positions with the respect to each asset subject to division.  Some of the statutory factors utilized by the court are as follows:

• Income of the spouses at the time of the divorce
• Likely financial future of each party
• Any other court-ordered financial obligations, such as spousal maintenance.
• Whether one of the spouses wasted the couple’s assets
• Whether a spouse fraudulently transferred property in anticipation of divorce
• Duration of the marriage
• Age of the spouses
• Health of the spouses
• Whether one spouse can demonstrate a need to stay in the marital home — for instance, if the custodial parent needs to keep the home to raise the children
• Whether the assets are liquid
• Whether it is feasible to divide the property or make a distributive award instead.

In addition to the above, the court can consider any other factor it deems relevant in dividing the assets. The court specifically considers what the spouses may have lost at divorce, such as an interest in an inheritance, pension rights, or health insurance. It also evaluates future losses the spouses face in terms of taxes and the tax consequences of dividing certain assets such as securities.

As to the marital home, there is no secret, that unless a party can demonstrate the need to remain in the home until the children complete school or for some other compelling reason, the property will be sold and divided. The court will however allow one spouse to buy the other out prior to such sale. If both parties desire to purchase the subject property the court will attempt to determine which spouse has demonstrated a stronger attachment and need for such property or simply order the property sold and divide the proceeds.  

Some assets aren’t easy to divide between individuals. Cash, which is very liquid, can easily be split between the spouses, but an interest in a business isn’t as easy, and sometimes impossible to divide. In such cases, the court has the option not to divide such property, and as an alternative, direct the retaining spouse to pay a distributive award from the value of some other asset to balance out any uneven distribution of property. Businesses are not the only assets that can pose difficulty in division. New York can also consider an advanced degree or professional license earned or obtained during the marriage as a marital asset subject to division as well.  Such asset is subject to division based upon the enhanced earnings capacity that usually results from the attainment of such degree and/or license. Here, like a business, the difficulty lies in determining the value of such an asset and equally difficult is determining to what extent the other spouse contributed to the obtainment of such degree or license.  

 Although fault in causing the marriage to fail is seldom used as a factor in equitable distribution, the court can award less of the marital property to one spouse if it can be demonstrated that marital assets were wasted to the extent that they were utilized for self-serving non-marital interests. Some examples of marital waste include: substantial gambling losses, drug and alcohol use, expenditures for  extramarital affairs and extravagant purchases. 

The above is an overview of the issues involved in determining the equitable distribution of marital property.  The property issues can range from the routine division of a marital home to the most complex.  At the Law Offices of David Smoren, PLLC we have a demonstrated record for achieving our client’s goals with respect to the division of marital property. We have successfully negotiated numerous written property settlement agreements that have resulted in the achievement of our clients goals without the stress and substantial cost of litigation. At the same time, we have the experience to handle the most complex distribution issues that arise with substantial and diverse marital assets that cannot be resolved without judicial intervention and trial.

Call us today at 718 225-6700 for a free phone consultation, or to arrange for a comprehensive office consultation to discuss your options or simply post a comment or question on the contact form.