In New York, as in the majority of states, property is divided equitably. This does not necessarily mean equally; it means fairly, taking into account the full picture of a marriage.
The first step is to determine what property is marital, and what property is separate – keeping in mind that the term “property” does not just mean real property, or land; “property” includes anything you own, including bank accounts, retirement benefits, pensions, business interests, stocks, vehicles, jewelry, furniture – even Beanie Babies (or, to bring this old cliché more current, Labubus). It can also include debt.
It is easy to assume that if an asset is only titled in one spouse’s name (such as an individual bank account, retirement account, vehicle – or even the marital residence) would be that spouse’s separate property; but this assumption would be incorrect. In general, any property acquired during your marriage is marital property, no matter how it is titled. For example, if you have a separate bank account in which you deposit your paychecks, that account is a marital asset. The retirement benefits you’ve earned from work during your marriage are marital assets.
This is because a marriage is an economic partnership; we assume that a spouse’s earnings are due, at least in part, to the support he or she has from the other spouse. Any money or assets earned/acquired due to one spouse’s active efforts are marital.
Any property you own is presumed marital, whether it’s titled in the name of both you and your spouse, or just you, or even jointly with a third party. If you have brought assets into the marriage, it is your burden to prove that any property is actually your own separate property.
In general, separate property includes property purchased prior to your marriage; property inherited by you; gifted to you; or personal injury proceeds. However, even if these assets were initially separate property, they can become marital property if you “commingle” them with marital assets. For example, if you receive a cash inheritance and deposit it into an active joint bank account with your spouse, that cash – which was initially your separate property – has likely become marital. If you have significant pre-marital assets that you want to protect, you should strongly consider entering into a prenuptial agreement.
Once the pot of marital assets (the “marital estate”) is determined, the next step is to decide how to equitably distribute those assets to each spouse. The easiest way, of course, is to split everything down the middle. Presumably, both spouses contributed equally to the marriage (in his or her own way, whether by earning actual income/assets or by taking care of the household and kids so that the other spouse could be free to earn income, advance in their career, grow their business, etc.), so both spouses should benefit equitably from the martial partnership. The Domestic Relations Law (the law that governs divorces in New York) specifically lists all the factors a court should consider when determining how to divide marital assets, including the length of the marriage, the contributions of each spouse to the marriage and to each other’s careers, and each spouse’s ability to earn future income.
The courts generally do not consider the “fault” or “blame” of either spouse for contributing to the breakdown of the marriage; equitable distribution is not meant to “punish” a spouse for bad behavior. However, the courts will consider certain financial bad acts, such as the “wasteful dissipation” of marital assets, or domestic violence perpetrated by a spouse when determining how to equitably distribute marital assets.
It is near impossible to maintain the same standard of living you enjoyed during a marriage after a divorce. Distributing marital assets equitably, rather than simply equally, can help ease the transition from one household to two.
This is not intended to be legal advice; you should contact an attorney to discuss your specific situation.
Rebecca Johnson is senior counsel at J&G Law, concentrating in matrimonial and family law. She can be reached by calling (845)764-9656 or by email.