When Does Equitable Distribution Mean Equal or Unequal in New York Divorces?
In the state of New York, marital assets and debt are often acquired over the course of a marriage. These financial matters are not covered under the legal exception regarding separate property. The separate property exception refers to property that a spouse originally had when entering the marriage and kept separate from their spouse for the entire course of the marriage. Also included in the exception are inheritance or gifts that were kept separate from a spouse. Under state law, marital assets have a much broader definition. When a party claims that an aspect of their holdings is separate property, it is their responsibility to prove that it fits the separate property definition. During divorce proceedings, all separate property must be properly identified while marital assets and marital debt must be distributed.
When involved in a divorce proceeding, “equitable” can sometimes mean the equal distribution of property, but it could also mean something different. In its broadest definition, the term “equitable” refers to what is fair for both spouses. If a pre-nuptial agreement was signed, this might already define the way that the marital property must be divided. In some rare circumstances, a court does have the ability to set aside pre-nuptial agreements or void them entirely. When no prior agreements have been established, the involved parties will mediate with their attorneys to reach an understanding regarding what is equitable. If mediation doesn’t produce a settlement, then the judge overseeing the divorce proceeding will be required to ensure equitable distribution.
Things aren’t necessarily just divided down the middle when a couple divorces. In the simplest cases, usually this is the solution employed. But in more complex cases, the split might be different; seventy percent of the assets might go to one spouse and only thirty percent to another. Sometimes the assets are split equally, but only after one side has had credits applied to them. Sometimes certain assets are awarded to one spouse only.
When the parties use a mediation process, the definition of equitable distribution will be determined by said parties. They can agree on which assets should remain with which spouse. However, if the case goes to trial, the decision is in the hands of the judge. The judge will become familiar with the circumstances and factors involved in the divorce proceeding by listening to arguments, reviewing evidence, and familiarizing themselves with the official documentation.
There is precedent for multiple different types of distribution in the state. In an appellate court, equal division was considered to be proper when considering a twenty-two year marriage. In this marriage, the husband and wife had both contributed the same amount of money and assets toward their total property accumulation. In the original trial, the wife was awarded eighty percent of proceeds generated from selling the marital residence while the husband only received twenty percent. When the case was appealed, the appellate court overturned the ruling on the grounds that since both parties had contributed equally to the assets, the assets should be divided equally.
There is another relevant case where equal distribution was considered appropriate in which the parties had been married for more than nineteen years. The husband had a full time job as a school principal. The wife worked part time and had a high school education. During the trial, the court determined that their contributions and other financial matters should be weighed equally. The ruling was for both parties to receive an equal share of assets including the home and the husband’s pension. Additionally, the wife was permitted to remain in the marital home until after all children had turned twenty-one. When the home was sold, the wife was meant to be given a credit for any contributions she had made toward mortgage payments after the divorce was finalized.
In some cases, credits will be applied to one or more parties before the marital property is split. One example is Hutchings v. Hutchings. The husband received a credit covering a $10,000 loan that he had assumed payment for prior to the division of the marital assets. The court, therefore, ruled that the husband should not receive fifty percent of the marital assets when his contribution to the assets was less than the wife’s. In another case, Naimollah v. De Ugarte, the husband was not rewarded many marital assets because he had not contributed very much to the marriage.
In one case, the New York Court of Appeals awarded thirty-five percent of a couple’s marital assets. This couple’s marriage had lasted thirty-five years, and both involved parties had made substantial monetary and non-monetary contributions to their family. The court considered that only one spouse was involved in purchasing a major asset, and the couple had lived apart for twenty-eight years.
In Francis v. Francis, the court ruled that no assets would be distributed in the other spouse’s name. Instead, each relevant party would be entitled only to the assets that they currently owned. The case was begun when the couple had already been separated for thirty-seven years. Upon the original separation, they had both contributed nothing to the marriage. The wife had a child with another man, who she was living with while separated from her husband.
What laws do judges use to make these decisions? In New York, the legislation is a part of the Domestic Relations Law. To summarize, this legislation provides the following criteria: A court may consider property while the couple was married, income of both parties, the age and health of the parties, the length of the marriage, whether custodial parents need to continue living in the marital residence, pension losses and inheritance losses, health insurance loss, other contributions to marital property, alimony payments, liquidation of marital assets, predicted future financial positions of the parties, tax issues, attempts to conceal assets, and the complications inherent in business valuing.
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