Focus on NEW YORK'S Equitable Distribution LAW

Tools for Confronting Divorce

     In New York, upon divorce, a court will equitably distribute marital property.  This equitable distribution system, enacted approximately 25 years ago, in part to treat marriage as an economic partnership, leaves judges with discretion in distributing the value of a family’s assets, regardless of who holds title to the property.  Absent a system that is without discretion, court rulings come down in an unpredictable nature.  For instance, in a recent decision from January 2003, a wife was awarded 50% of the appreciation in value of her husband’s hardware business, whereas, in a November 2002 decision, another court sitting in New York, awarded a husband nothing in regard to his wife’s consulting business.  These two cases are at odds with each other; however, this is not at all rare in matrimonial cases.  Many factors play a part in a decision of a court; the facts of the case, differing methodologies in valuation, the judge, and the strategy and arguments put forth by the attorneys representing the litigants.

     In general, upon divorce, a New York court will follow the three steps for dividing property:  First, the court will determine if the asset is marital property or separate property.  Generally, with some exceptions, property that is acquired after the commencement of the marriage will be deemed marital property, and thus subject to distribution between the spouses.  On the other hand, property acquired prior to the marriage will be deemed to be separate property, and thus not subject to distribution.    However, in general, appreciation of the value of separate property, prior to the commencement of divorce action, through the efforts of one spouse will be deemed to be marital property and thus subject to equitable distribution.  In order for the appreciation of the asset to be subject to equitable distribution, a court must find that the value increase was aided or facilitated by the non-titled spouse’s direct or indirect efforts.  Once the court deems that an asset, in whole or in part, is marital property, a value should be assessed to the asset.  Third, the court must determine the equitable portion of an asset each spouse is entitled to and how to distribute the value.  The judge in these matters is given great discretion in how to apportion the marital property.  It is notable that equitable distribution is not equal distribution; instead, a court will look to factors prescribed by law.

This focus section is adapted from an article entitled Considering the Economic Fallout of Divorce authored by Gregory Scolieri which appeared in Long Island Business News.

The above information is provided for informational purposes and does not constitute legal advice and/or the current status of the law.  Do not act or rely upon the information contained within this web-site and/or web-page.  The facts and circumstances of your life, issue, situation and/ or case will determine the advice an attorney will give to you.  Seek the advice of an attorney in your area.