For many people, divorce can be a frustrating and difficult process. Even if they look forward to the freedom and fresh start that come at the end, the legal process of separation and divorce can be a struggle. In addition to processing the end of a significant relationship, those going through a divorce usually have to deal with a lot of stress and uncertainty regarding the future.
Unless there is a prenuptial agreement on record for the marriage, the outcome of a divorce can feel unpredictable. Even with a prenuptial agreement, it’s possible that the courts could end up deciding how to divide your assets. When you don’t know what assets you will have at the end of a divorce, it can be hard to plan for the future. Thankfully, informing yourself about the standard practices of the courts can help you understand what you can expect from the asset division process.
Understanding separate and marital property
The easiest way to determine how assets will get divided is to look over what possessions and assets are marital property and which ones are separate property. New York considers most assets acquired during a marriage marital property. Exceptions to that include gifts and inheritances, as well as certain other assets, such as personal injury compensation in some cases.
In general, possessions including real estate owned before a marriage remain the sole and separate property of the individual. If those assets increase in value during the marriage, that increased value is also separate property. Assets acquired or accumulated during the marriage, however, are typically subject to division. Once you determine what is separate and what is marital, you can provide the courts with a thorough inventory of your assets and their values.
New York courts strive for equitable distribution
When deciding how to divide the marital assets, the courts focus on equitable distribution. That means looking closely at a number of factors, including the length of the marriage, the contributions of each party, financial or otherwise, the income and potential for future income of each spouse and even custody of minor children. In some situations, equitable may mean uneven distribution to offset differences in earning potential or to compensate one spouse for the dissipation of marital assets by the other.
Equitable distribution looks different in every case. Sometimes, it could mean selling your marital home and splitting the equity. Other times, it means allocating assets valued at half the home’s equity to one spouse, while the other one refinances and assumes ownership of the property. Sometimes it means dividing retirement accounts, and sometimes it means considering their value while assigning property to the other spouse.