The following is a somewhat simplified primer on New York equitable distribution law.
New York is one of the majority of states that employs an "equitable distribution" project to the department of property when there is a divorce. There are three steps to this process:
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Classification of property (i.e., either it is "marital" and branch to equitable distribution or separate and is awarded to the spouse in whose name it is titled); Valuation; and Distribution.
1. Classification.
There is a presumption that all property owned by the spouses, regardless of in whose name it is titled, is marital property to be divided "equitably" in the middle of them in the event of divorce. The spouse who claims that property is his or her separate property has the burden of proof to show that the source of the property falls in one of the "separate" categories:
(a) property that he or she had prior to the parties' marriage that has not been located in the joint names of the spouses.
(b) property that a spouse inherited, either before or during the marriage that remains titled in the name of the spouse who inherited it;
(c) property that was gifted to one spouse by anyone other than the other spouse;
(d) property that a spouse received as payment for personal injuries in a law suit.
In all of these cases, the property claimed to be "separate" must not have been comingled with marital property or revenue or located in the spouses' joint names.
There are two exceptions to the stringent rule that separate property must not have been comingled with marital property:
(a) If funds (for instance, Husband receives an patrimony check of 0,000) are located in the spouses' joint list solely for convenience until the check clears and then are withdrawn and located in Husband's private list that meets the other requirements of a separate asset, the funds will still be determined the Husband's separate property.
(b) If there is no clear paper trail, but there is no other explanation for the source of the funds that are claimed to be separate, they may still qualify as a separate asset. By way of example, immediately prior to the marriage, the Wife has a bank list that contains 0,000. during the policy of the marriage, she deposits her revenue into that account, and at the time of the parties' divorce, the list contains 0,000, but only ,000 can be traced to the Wife's earnings, the
0,000 may qualify as the Wife's separate asset.
Property that falls into any of the above categories will be deemed the separate property of the spouse in whose name it is titled. Where things get more involved is in determining either the appreciation (i.e., increase in value) of separate property remains separate or is deemed marital. If the increase in value is due solely to market factors, it will be separate. For example, if at the time of the marriage, Husband owns 100 shares of stock that have a market value of ,000 but during the policy of the marriage the value has increased due to the stock market to ,000, the whole estimate will be his separate property. If, however, the increase in value of the asset is due to the efforts of either spouse, the appreciation will be deemed to be marital. For example, Wife has a small firm that is worth 0,000 at the time of the marriage. during the policy of the marriage, the Wife works in the firm and it increases in value to ,000,000. The appreciation (0,000) will be deemed to be a marital asset.
The term "Property" in New York includes a very broad type of assets. Real estate, bank accounts, deferred assets such as 401(k) plans, Ira's and pensions, tangible property such as furniture, art, automobiles, and inescapable intangible property such as licenses, degrees, and even "enhanced earning capacity" can be deemed assets branch to equitable distribution.
2. Valuation.
Once marital and separate property have been classified, it becomes principal to value each asset. Bank accounts and other monetary assets are valued as of market value. When dividing those assets, it may be principal to factor in any tax consequences, such as capital gains tax.
If an asset's value is not effortlessly determinable, it may be principal to have it evaluated by an expert. Real estate appraisers and forensic accountants are the two experts most often called upon to support in that process.
3. Distribution.
New York employs an "equitable distribution" of assets that does not necessarily mean an equal department of assets, although there has been a clear trend to divide assets equally, especially in long-term marriages. Factors that may be taken into consideration contain the length of the marriage, the estimate each spouse's separate property, and either either spouse has wastefully dissipated marital assets.
How asset is Divided Under New York's Equitable Distribution Law
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