Divorce and Property Improvements in New York

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 What are Divorce and Property Rights in New York?

When you married your spouse, you may have already owned property or had savings or investments. Your spouse also may have entered the marriage with property, cash, and or investments. This is known as separate property. You and your spouse most likely obtained more property and cash during the marriage. The property and cash you acquired during the marriage will be presumed to be marital property.

Furthermore, the marital property obtained during the marriage is referred to as the marital estate. You and your spouse may exclude certain property from the marital estate by entering into a marital agreement, such as a prenuptial or postnuptial agreement. Without such an agreement, there is a presumption that property gained during the marriage is marital property. This is true except for inheritances, personal injury or worker’s compensation awards for pain and suffering, and third-party gifts.

What Does Marital Property and Real Property Include?

Marital Property includes:

  • Things purchased while you and your spouse were married, except for any contributions of your separate property you may have made to such property, like paying part or all of the down payment with separate property funds;
  • Personal property, like cars, boats, airplanes, furniture, and the artwork you and your spouse acquired during the marriage;
  • Cash, securities, bank accounts, retirement accounts, and pensions gained during the marriage;
  • Advanced educational degrees, and permits to engage in specialized businesses acquired during the marriage and;
  • Gifts to each other.

Separate property includes:

  • The real property you obtained or owned before the marriage;
  • Personal property you obtained or owned before the marriage;
  • The property you gained by inheritance or gift from someone other than your spouse during the marriage;
  • The compensation you received for personal injuries during the marriage is not related to loss of wages or earning capacity during the marriage;
  • The property you acquired in exchange for your separate property during the marriage;
  • Any increase in the value of your separate property, except to the extent that the increase is due to contributions or efforts of your spouse or self during the marriage and;
  • Property is described as separate property in a written agreement between you and your spouse.

Additionally, when you or your spouse file for legal separation or divorce, you can agree on the division of marital property and separate property. If you cannot agree, the court will decide, after trial, which property is separate property and which property is marital. The court will also decide what would be a just and equitable, but not necessarily equal, division of the marital property.

Moreover, unless you have mixed or commingled your separate property with marital property or separate property is transmuted into marital property, your separate property remains yours after the divorce, and so does your spouse’s separate property. The court will affirm that your separate property belongs to you and your spouse’s separate property belongs to your spouse.

What Happens if you Commingle your Separate Property with Marital Property in New York?

If you commingle (mix) your separate property with marital property, the court may consider part or all of your separate property to be marital property, and divide it up with your spouse. This rule does not generally apply to real estate, particularly the marital home, where a separate property contribution to the purchase will remain your separate property. You will be able to receive your separate property contribution back after the marital house is sold.

Some of the scenarios of mixing properties are described below:

  • You inherit stock and deposit it into a jointly-owned investment account that both you and your spouse collaborated to grow;
  • You brought a valuable antique chair into the marriage, but it was in disrepair; you encourage your spouse to get it back in shape for sale. Your spouse decides to do so, and at the time of the divorce, the chair has dramatically increased in value. A court may consider the increased value of the chair to be marital property due to your spouse’s direct contribution to improving its value.
  • You have a bank account from before the marriage in your name and after the marriage, you add your spouse’s name. By adding their name, there is now a presumption of a gift of one-half the value of the account, and the entire account becomes marital property.

How is the Marital Property Divided in New York?

Once the court evaluates the “marital pot” or the marital estate, it will start the process of valuing and then dividing the marital property. New York courts must divide the marital property “equitably.” This means fairly, considering the circumstances of the case and the parties involved, but it does not necessarily mean “equally.” There is no statutory requirement for a 50/50 split of marital property.

In New York, the property is not automatically divided in half and distributed equally to each spouse. Rather, the court takes into account 13 specific factors in determining the equitable distribution of property:

  • The income and property of each spouse at the time of the marriage, and at the time of the divorce;
  • The length of the marriage and the age and health of both spouses;
  • If there are minor children involved, the need of the spouse who has custody of the children to reside in the marital residence and to use or own its household contents;
  • The loss of inheritance and pension rights of each spouse due to the divorce;
  • The loss of health insurance benefits of each spouse because of the divorce;
  • Any award of support or maintenance the court will be deciding;
  • Whether one spouse made contributions to marital property that the spouse does not have title to; for instance, where one spouse assists the other spouse to increase their ability to earn more money by getting a degree or certification;
  • The liquid or non-liquid character of all marital property (“liquid” means that the property can easily be converted to cash);
  • The probable future financial situation of each party;
  • The impossibility or difficulty of determining the value of certain assets, like interests in a business, and whether one spouse should be granted the business so it can be run without interference by the other spouse;
  • The tax consequences to each party;
  • Whether either spouse has wasted or used up any of the marital property while the divorce was occurring and;
  • Whether either spouse transferred or disposed of marital property at less than market value, knowing that the divorce would be happening.

Even after examining these factors, the court may take into account “any other factor” it deems to be fair in arriving at an equitable distribution of marital property. Also, certain types of property cannot be divided into kinds, such as real property. In that situation, the court may make a “distributive award.” A distributive award is a monetary payment by one spouse to the other, either in a lump sum or paid overtime to compensate for the property which could not be distributed in kind.

When Do I Need To Contact A Lawyer?

If you are obtaining a divorce in New York and have questions regarding your property division, it is recommended to seek out a local New York divorce attorney to assist you in these issues.

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