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What is Marital Property and Separate Property in New York Divorce?

One of the most complicated aspects of many divorces is the division of property. What is considered marital property and thus divided in a marriage dissolution? What is considered separate property and can be lawfully taken from the marriage by the rightful owner? These questions are the basis of many protracted court cases and legal disagreements.
Although New York law is complex, there are a few generalities that the courts will generally uphold. It is crucial to understand the laws behind the division of property if you are considering a divorce in the future.

The New York Definition of Marital Property

New York Domestic Relations Law gives most of the definitions and practices for divorces in the state. In this law, marital property is defined as property obtained after the date of marriage and prior to a legal separation or case filing. In some cases, other written agreements about division of property may supersede this. In most divorces, this property is split when a marriage is dissolved.
A lot of assets can fall under marital property because the court assumes that married partners are working equally to add to their wealth. Assets that count as marital property include:

  • Real estate
  • Cash and bank accounts
  • Automobiles
  • Retirement funds and pensions
  • Stocks and bonds
  • Art, furnishings, and collectibles
  • Businesses
  • Business permits
  • Advanced degrees

Many people believe that domestic law advocates for an equal split of marital property. However, the issue is much more complicated. Rather than going for an even division, courts aim to do what is fairest to both parties.

Exceptions to Marital Property

Although most assets are divided in a dissolution, there are broad exceptions. One of the biggest exceptions to marital property in a divorce is the large and murky area known as separate property. Separate property usually is property that was acquired before the marriage or after a filing for legal separation as well as any dividends or increase in value of this property. It also can include inheritance and gifts from people outside of the marriage.
In general, people will not have to divide separate property in a divorce, but rather can leave with the entire value. However, this can become complicated in application. Many couples use marital assets to maintain their separate property, which can then make the property more of a marital asset. For instance, if a person brings a home into a marriage and then uses their wages (which are considered community property) to pay property taxes, the home is no longer entirely separate.
Courts deal with this issue in a variety of ways. Sometimes they will rule the property entirely a marital asset or entirely separate. In other cases, they will “credit” funds use to maintain the separate property to the property being divided. An experienced divorce attorney is essential for people who wish to leave with their separate assets intact.

What About Prenuptial Agreements?

Many couples make agreements on how to divide property ahead of time. When this is made before a marriage, it is called a prenuptial agreement. When it is made after the wedding, it is called a postnuptial agreement. Prenuptial agreements are much more common because people are generally more motivated to negotiate an agreement before the marriage.
When people agree ahead of time what will be considered marital vs separate property in the event of a divorce, the courts will generally uphold this. These agreements can be simple or very complex. In general, they must have the agreement written clearly, then signed and acknowledged by all parties before a notary. The agreement must have been made knowingly and freely.
Prenuptial and postnuptial agreements can include what will be separate and marital assets in a divorce as well as a variety of other agreements. For example, people can agree before a divorce on how much (if any) alimony will be paid and for how long. They can detail child support, care, and education. People can waive their right to protest a will or take other legal action.
In most cases, when these agreements are made with the advice of a qualified marital attorney and agreed to by all parties, courts will uphold them. They are considered “written in stone.” Most agreements that are not honored by courts were not made with the advice of legal counsel.

How Is Value Determined?

It is easy to determine a value for cash, stocks, and other goods that have an explicit number attached to them. Other property can be more complicated. A home, for example, may have a value that is different from its appraised value. Art, furniture, and other marital belongings can be more complicated. In general, appraisers and financial specialists can help to put a dollar amount on these assets. However, this can become a point of contention. Even experts often disagree on the value of an item. In addition, there can be sentimental and other value that confounds the issue.

Dividing marital and separate property can be very complicated. It is essential to have the advice and assistance of an experienced divorce attorney. If you live in the Long Island area and need assistance with a prenuptial agreement or the division of property in a divorce, contact Long Island Divorce Lawyers today. We are ready to help you get the divorce settlement that you deserve.

This article is by, a premier Los Angeles hard money lender. In a New York divorce, the courts will attempt to divide marital property fairly, which does not always mean equally. Division of marital assets takes into account the unique circumstances involved as well as the financial contributions and situations of each spouse. It’s important to understand that only marital property will be divided in divorce, not separate property that belongs to only one spouse. New York law makes the difference between these two types of property very clear.

What Is Marital Property?
Property and assets obtained during the marriage are usually presumed to be part of the marital estate. Some property can be specifically excluded from a marital estate with a prenuptial or postnuptial agreement, however.
Marital property in New York may include:

  • Real estate purchased during the marriage. If one spouse used separate property — such as savings — to make a contribution to the real estate purchase, that spouse may claim more equity in the home as separate property in a divorce. This often happens when one spouse pays the down payment with their personal savings.
  • Personal property. This may include cars, artwork, and furniture purchased during the marriage.
  • Cash, bank accounts, retirement accounts, and investments acquired during marriage.

Prior to 2016, the lifetime value of a professional degree, business license, or career enhancement acquired during the marriage could be considered marital property. While this is no longer true, a judge can still consider the enhanced earning capacity that is developed during a marriage due to a license or advanced degree when dividing property or determining a spousal maintenance or support award.

What Is Separate Property?
Many people enter into a marriage with their own savings, investments, and property. Under New York law, separate property refers to any property acquired prior to marriage. There are also cases in which property received during the marriage can be considered separate, such as a gift or inheritance from someone other than the spouse or a personal injury award.
Separate property can come in many forms:

  • Real estate purchased or owned by one spouse prior to marriage
  • Personal property like a car obtained prior to marriage
  • Any property obtained by gift or inheritance from someone other than the spouse, even if this property is obtained during the marriage
  • Property acquired in exchange for separate property during the marriage. As an example, one spouse may trade in their separately owned vehicle during the marriage for a new car.
  • Compensation for personal injuries during the marriage that are not tied to reduced earning capacity or lost wages.
  • Increased value of any separate property unless the increased value is due to contributions or effort by the other spouse during marriage
  • Anything named as separate property in a written agreement between spouses
  • Any property acquired by one spouse after legal separation.

Comingling Separate and Marital Property
Each spouse’s separate property remains with them after divorce unless the separate property is mixed with marital property. In this case, a court may consider the separate property as marital assets and divide it during the divorce. The biggest exception to this rule is real estate, which remains separate, even if it’s the marital home. Still, a home that becomes the marital residence, even if owned by only one spouse, may be considered partially marital property because marital money is used to pay for housing expenses.

How Marital Property Is Divided
Both spouses are encouraged to work together and with their attorneys to determine how their property should be divided. When divorce court processes a divorce decree, a judge will typically accept a written agreement between spouses. When spouses cannot reach an agreement, the court will decide what is and is not marital property and create a distribution plan.
New York courts consider many factors when dividing marital assets as equitably as possible. These factors can include:

  • A maintenance or support order by the court. If a spouse receives maintenance, they may be entitled to a lower share of equity in the marital home, for example.
  • Income and property of each spouse at marriage and divorce.
  • Age and health of each spouse
  • How long the marriage lasted
  • If minor children are involved, need of the spouse with custody to live in the marital property, and the use of the household contents
  • Loss of health insurance
  • Whether marital assets are liquid or can be converted to cash easily
  • When there is a business, the court will consider whether it should be awarded to only one spouse for easier business management
  • The likely financial future of each spouse
  • Whether a spouse has wasted marital assets during divorce
  • Tax consequences
  • Whether a spouse has disposed of or transferred marital property at a price lower than market value with the knowledge that divorce was impending

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