As is the case with most states in the United States, New York utilizes what is known as the equitable distribution of property standard when it comes to assets and debts in divorce cases. Property and debt issues in divorce proceedings can prove to be contentious. Understanding that reality, you are best served having at least a basic understanding of what is involved in dividing the property and debt of spouses in a marriage termination case.
The Essential Elements of the Equitable Distribution Standard
The equitable division standard requires that marital assets and debts be divided or distributed in a fair, just, and equitable manner. The application of the equitable division of property standard necessitates a consideration of the specific facts of a divorce case and the circumstances of the parties.
The equitable division of property standard does not mean that the property and debts of the parties must be divided equally between them. In fact, understanding that every divorce case has unique fact patterns, an equal division of assets and debts is not that likely.
The equitable division of property standard is contrasted with the community property standard, which is utilized in about 10 U.S. states, including California. The community property standard establishes a legal presumption that the property and debts of a divorcing couple is to be divided equally between them, absent a compelling reason for a different distribution.
Understanding Marital Assets and Debts
One key factor that you need to keep in mind when considering the division of assets and debts in a divorce case is that only marital assets are subject to this distribution. Premarital assets and debts do not come into play. Premarital assets an debts are retained by the party that brought them into the marriage.
The reality is that ascertaining what truly are marital and non-marital, or pre-marital, assets can be easier said than done. There are some instances when property or debt clearly will not be subject to distribution in a divorce case. However, there are a multitude of divorce cases filed in New York annually in which disputes arise regarding what are and are not marital assets and debts.
If an individual enters a marriage with a completely paid off item of property, and the status of ownership of that property remains unchanged, that will likely not be considered a marital asset by the court. For example, if one of the spouses had purchased a set of sterling silver well before the marriage for his or her own use, and that set was fully paid off, that property is not a marital asset.
There are situations in which what is and is not a marital asset can become substantially murkier, or at least more difficult to do an appropriate assignment as marital or non-marital. The same holds true for debt.
If a person enters a marriage with a home that is mostly, but not completely, paid off, and the couple resides in the residence once married. the issue of the status of the property becomes more complicated. Payments made on the mortgage loan during the marriage are generally going to be deemed as payments made by both spouses. This is the case even if only spouse works.
Thus, in determining the status of the residence in regard to marital assets, the court is likely to assign part of the value of the residence as being included in the marital distribution calculation. The court is likely to set aside a disproportionate share of another asset owned by the parties in favor of the spouse that did not own the residence before the marriage to offset that individual’s share of mortgage payments made. Through this course, the party who owned the residence prior to the marriage is able to keep the property. Nonetheless, the spouse that contributed to the mortgage appropriately is compensated during the asset distribution process.
Disclosure of Assets
At the start of divorce proceedings, both parties must provide a verified accounting of assets and debts. This is provided to the court under penalty of perjury. Hiding assets or providing false information can result in serious penalties.
Through the disclosure of assets made at the commencement of divorce proceedings, the court is provided essential information on the value of property owned by the parties, the amount of debt maintained by them, and information about what may be claimed as a pre-marital or non-marital asset.
Legal Assistance in a Divorce Case
The first step in obtaining legal advice and assistance in a divorce case, including finding out more about asset and debt distribution, is arranging for an initial consultation with a reputable, skilled, and experienced New York divorce attorney. During an initial appointment with a New York Divorce lawyer, you will be able to obtain answers to your questions and an evaluation of your case. As a matter of practice, a New York divorce lawyer typically does not charge a fee for an initial consultation with a prospective client.