Marriage creates a co-mingling of assets, both literally and legally. However, certain assets remain the property of the individual spouse and are not included in the asset distribution process that takes place if and when a marriage ends. What determines whether property remains separate or is included in the equitable distribution plan in a divorce?
Separate property is the property each spouse owns when a marriage occurs. Anything obtained during the marriage is marital property, with a few exceptions. The property obtained during the marriage becomes part of the marital estate, unless a prenuptial or post-nuptial agreement excludes it from the estate.
Marital property includes items such as:
- Real property purchased during the course of the marriage, except for items purchased with contributions from separate property. For instance, if money you had prior to your marriage is used to make a down payment on a home, you might be able to argue that portion of the home’s value is separate property.
- Cash, bank accounts, and retirement funds acquired and/or accumulated during the marriage
- Personal property, including vehicles, furniture, or artwork
Separate property includes items such as:
- Real and personal property obtained prior to the marriage
- Property obtained through inheritance or gift from someone other than a spouse
- Property acquired in exchange for separate property (the example above of the down payment on a home)
- Compensation received as a result of a personal injury settlement not related to lost wages
- Property designated as separate in a pre- or post-nuptial agreement
- Increases in separate property value that occurred during the marriage, unless the increase in value was tied to contributions or actions of the non-owner spouse during the marriage
How is Marital Property Distributed in New York?
Property within the marital state is subject to equitable (fair) distribution. New York has not always been an equitable distribution state and it wasn’t until 1980 the courts enacted Domestic Relations Law section 236 part B, implementing equitable distribution as the means by which property is distributed in a divorce. The law eliminated financial inequities by distributing marital assets without regard to title, thereby embracing the modern concept of marriage as an economic partnership and allowing spouses to receive a share of the marital assets based on their contributions as a homemaker.
As a result of the change, when couples are unable to come to terms on their own concerning the distribution of their marital property, the court considers the following when dividing assets:
- Income and property of each spouse at the time of marriage and divorce
- Length of marriage
- Age and health of each spouse
- Presence of minor children and custody arrangements
- Loss of inheritance of pension rights due to the divorce
- Loss of health insurance benefits as a result of the divorce
- Awards of support or maintenance
- Contributions made by either spouse to marital property through education or training
- Liquidity or non-liquidity of all marital property
- Future financial circumstances of each spouse
- Ability to determine the value of certain asset
- Tax consequences for each spouse
- Whether property was wasted during divorce proceedings
- Transfer or disposal of marital property once divorce was probable
- Any other factor that is pertinent to a particular case
If you have questions about the difference between separate and marital property, or you want to ensure assets are protected after you file for divorce, contact the Law Offices of Elan Wurtzel by calling 516.822.7866.
Source: NYU Law