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Equitable Distribution

New York State is an “equitable distribution” state, meaning that property will be distributed, and debt allocated, based upon numerous statutory factors the court must consider. (Equitable distribution does not mean that property will be divided or debt allocated equally.)

These statutory factors include a consideration of the income and property of each party at the time of marriage, and at the time of the commencement of the action; the duration of the marriage and the age and health of the parties; the need of the custodial parent to occupy or own the marital residence and to use or own its household effects; the loss of inheritance and pension rights upon the termination of the marriage; any award of spousal maintenance; any claim or contribution made to the acquisition of marital property by the party not having title; the liquid or non-liquid character of all marital property; the probable future financial circumstances of each party; the impossibility or difficulty of evaluating any component asset or any interest in a business, corporation, or profession, and the economic desirability of retaining such asset or interest intact and free from any claim or interference by the other party; the tax consequences to each party; the wasteful dissipation of assets by either spouse; any transfer or encumbrance made in contemplation of a matrimonial action without fair consideration; the loss of health insurance to a spouse, and any other factor appropriate to consider.

A court does not have the authority to divide property and allocate debt (as opposed to awarding child support or spousal maintenance) unless and until a divorce is agreed to and/or granted. A court does have the authority to “preserve” marital property, for instance, by restraining a party or the parties from using, borrowing against, selling, or transferring assets while an action is pending.

Title (who owns the property as a matter of record) is not relevant in terms of whether an asset is subject to equitable distribution, as long as the asset is marital, that is, acquired during the marriage. There is a legal presumption that property acquired during the marriage is “marital” and subject to equitable distribution.

If a party is claiming that property is “separate” and not subject to equitable distribution, that party has the burden of proving that it is separate property. Examples of separate property are property acquired prior to the marriage, property acquired by inheritance or as a gift from someone other than from the spouse, or property acquired as compensation from a personal injury case. Of course, many issues and “marital” claims may still arise even in the area of separate property.

Marital “fault” or grounds is not a factor in terms of the distribution of marital property unless the fault is “egregious” or involves the wasting of marital assets.