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Dividing Assets in a New York Divorce
Family Law Attorney in Westchester County
In New York divorce cases, the concept of “equitable distribution” is used to deal with the division of marital assets.
Understanding Divorce Terms:
- “Equitable” means fair, not necessarily equal. However, in many cases courts divide marital assets equally and will value the contributions of spouses who stay at home to care for a family the same as spouses who work and earn the majority of a family’s income.
- “Marital property” means all income and any assets the parties acquire during the marriage, from the date a couple was married to the date the divorce action is filed. Marital property includes, but is not limited to:
- Bank Accounts
- Household Items
- Social Security Benefits
- House and other real property
- Stocks and other investments
- Retirement plans (pensions, 401(k)s and 403(b)s)
- Frequent flier miles and other corporate rewards
- “Gifts” - Spouses will get to keep “gifts” – including their respective wedding rings – as well as any inheritance held in only one spouse’s name.
When we discuss “dividing assets,” this does not mean spouses will actually “split” things like houses and businesses and collectibles like artworks or antiques. It means that each spouse will be entitled to a portion, probably close to half, of the equity of all these things. Often, one spouse will “buy out” the other’s equity in a car, house, or business.
Important Questions Raised with Equitable Distribution
- What if my spouse refuses to turn over financial information?
If a spouse withholds financial information during the discovery period, the court can compel that spouse to release that information. Your attorney may also serve subpoenas for documents and upon parties to provide information.
- Will the marital home (house) have to be sold?
The marital house is sometimes the largest of the marital assets. If one spouse wants to retain the house, he or she must buy out the other spouse’s equity in the house, either by refinancing the mortgage or by selling off or trading other assets. In some cases, it is necessary for a judge to order that the house be sold.
- What if the house was purchased before the marriage?
If you purchased your home before marriage, it’s possible that you could retain it as separate property. However, if you transferred the title to your spouse, the court might determine that you “gifted” all or a portion of the property. If the house remained solely in your name, the court will examine any appreciation in the value of the house. If the house appreciated solely due to market forces, you will retain the value of that appreciation as well as the original value. If, however, you and your spouse made any improvements to the house, or if your spouse made any financial contributions to the equity of the house, that property will become a marital asset subject to equitable distribution.
- How can I protect my inheritance?
If you receive an inheritance it may remain your separate property, even if you received the inheritance during your marriage. It depends, though, on how you kept that inheritance. If it was a cash inheritance and you kept it in a separate account under your name only, and did not commingle any inherited funds with funds in a joint account, the court will not consider your inheritance to be marital property. If the inheritance was a piece of real estate held in your name only, and you made no improvements to the property using marital funds, it will remain separate property. However, if you put your spouse’s name on any cash account or property, you risk the court determining that all or part of the inheritance is marital property.
- What about our shared business?
In most cases of shared business, one party will have a greater interest in the business. Then it would be natural for the principal owner and operator to retain the business, though the other spouse may be entitled to a share of its equity. In some cases, though, spouses have an equal interest in a business and depending on the circumstances, it might be better for one spouse to buy out the other’s equity, or for both to sell the business and split the proceeds.
- What about my medical insurance after divorce?
Spousal medical coverage ceases once a divorce is finalized. In some cases, this is a reason that some couples choose to legally separate rather than divorce.
Helping You With Equitable Distribution During Divorce
Since every marriage is unique, we realize that part of our role is to help you understand the many issues and concepts involved in the divorce process and to find the best solution for you. At Riebling & Payton, PLLC, we pride ourselves on doing this for our many divorce and Family Law clients. With offices located in White Plains, NY and Mount Kisco, NY we are prepared to meet with clients throughout Westchester County.
Contact us online or call (914) 712-6878 to schedule your free initial divorce consultation.