Equitable Distribution in New York

If you are getting married, going through a divorce, or even contemplating divorce, one of the many questions to ask yourself is how does the law in your state divide property upon divorce.

If you litigate your divorce in the State of New York, the court will apply the Law of Equitable Distribution. The term “equitable” does not necessarily mean equal. This law provides that property acquired during your marriage is considered “marital property.” Marital property is divisible between spouses who are divorcing, and there are factors that courts consider when determining how to divide the marital property. Generally, the longer you are married, the more “equal” the division of property will be.

What most people do not understand about the Law of Equitable Distribution is that it does not matter who holds title to the property — if the property was acquired during your marriage, it is marital property. For example, retirement fund assets are typically in the name of only one spouse. However, under the law, this does not prevent the asset from being divided between the spouses. If there have been contributions to a pension fund, 401K, 403B, IRA or the like during the term of your marriage, those contributions are considered marital property. The same holds true for cars, real property, or any other assets titled to only one of the spouses. As long as the asset was acquired during the term of your marriage, it is marital property.

Separate property, however, is not generally divided between spouses upon divorce. Some examples of separate property include any assets accumulated prior to the date of marriage. It also includes personal injury settlement awards and property acquired by bequest; devise or descent; or gifts from a party other than the spouse during the term of the marriage.

The best way to work out a settlement that differs from what the law dictates is to provide an alternate means for the division of your property in either a pre- or post-nuptial agreement. These types of agreements give the parties the freedom to structure their own settlement pursuant to a legally binding contract. The parties define what marital property and separate property are, and ultimately take control of how assets are divided upon divorce.

In mediation, the parties are free to negotiate a settlement that differs from what the law provides also — and many of my clients do agree to “do their own thing,” so to speak. However, the parties must agree to deviate from what the law provides. In mediation, the parties often use creative means to structure their divorce settlement and, in the end, both parties are satisfied with the outcome.

Regardless of whether you have a pre- or post-nuptial agreement, mediation gives the parties control not only over the division of assets but over the entire process. This is substantially more appealing than putting such a personal matter in the hands of a judge who barely knows you or your circumstances.

If you have questions about the Law of Equitable Distribution or the mediation process — and how mediation can work to your advantage in structuring a win-win settlement — please reach out.