Long Island Equitable Distribution Lawyers

How does New York law divide a couple’s assets and debt?

Courts generally follow the steps below when dividing assets in compliance with the equitable distribution rule:

1.  Sort the property. A court decides whether each asset is marital property or separate property according to the following definitions:

• Marital property: Property obtained after the marriage began
• Separate property includes property obtained before the marriage and continually held as separate property and property that a spouse inherited or received as a gift during the marriage and continually held as separate property. Whether property that was separate remained separate is a question of fact for the judge to decide; your attorney must be able to argue persuasively in your favor.

2. Assign values to the property. If necessary, marital property is appraised to assign a value as of a specific date. The date selected can have a significant effect on the appraised value. For example, an appraisal of the marital home or a stock portfolio could vary greatly between the date you file for divorce and your final divorce hearing.

3. Distribute assets. Finally, the court distributes property to the spouses based on what the judge considers fair under the circumstances. New York courts rarely punish a spouse for being at fault for the divorce but will punish bad behavior that dissipates the marital estate more often. A spendthrift spouse may receive a smaller share of assets as a penalty.

The problem of joint and several liabilities when dividing debts and liability

Couples who negotiate a divorce settlement have to be careful about how they assign debt. Their settlement agreement may intend that one party, such as a credit card, takes sole responsibility for liability. However, unless the documents are correctly executed, the creditor may claim the debt is still joint and several. If your spouse stops paying, the creditor may come after you to satisfy the obligation. An experienced divorce attorney can help ensure your divorce settlement is clear about debt assignments and spare you the aggravation of dealing with your ex-spouse’s creditors.

Retirement division in a New York state divorce

Retirement accounts are frequently the most significant asset in a Long Island divorce. According to New York state law, retirement funds paid into during the marriage are marital property and subject to equitable distribution. Most often, an ex-spouse will be entitled to 50 percent of the benefit earned during the marriage. Through a qualified domestic relations order, QDRO, your attorney can divide a retirement plan without liquidating the account, saving you from tax liability.