During divorce, how do New York courts divide property?

While U.S. divorce rates are on the decline, each year hundreds of thousands of American couples go their separate ways. According to the American Psychological Association, 40 to 50% of U.S. marriages ultimately fail.

In some cases, separating spouses are able to negotiate a workable division of property without court intervention. Unfortunately, with emotions running high, that is not always possible. It is important for divorcing couples to know that, if they cannot agree about how to divide assets, New York law will determine it for them.

Marital property vs. separate property

In New York, most assets acquired during a marriage by either spouse become shared marital property. Exceptions include personal inheritances, third-party gifts to only one spouse and pain and suffering awards for personal injury or workers’ compensation claims. When a divorce goes to court, all marital property is subject to equitable distribution. Marital assets may include:

• Personal property like vehicles, furniture, artwork or other items that either spouse purchased during the marriage
• Real property that either spouse acquired during the marriage, except any portion that one spouse contributed from separate property funds
• Gifts that either spouse made to the other during the marriage
• Bank accounts, cash, securities and retirement pensions acquired during the marriage

On the other hand, assets that either spouse acquired before the marriage are separate property. Unless commingled with shared assets, separate property still belongs only to one spouse and is not subject to court distribution. This may include real or personal property and increases of that property’s value except insofar as the other spouse contributed to that increase.

Equitable distribution

Once the court has determined which assets are marital and which are separate, it begins the process of valuing marital property and distributing it between spouses. However, the law follows a system of equitable rather than equal division. The court may award a greater portion of the marital estate to one spouse depending on certain factors, including each spouse’s earning capacity, the duration of the marriage and whether either spouse attempted to dissipate or dispose of shared assets in anticipation of the divorce.