Equitable Distribution

The basic premise of the Equitable Distribution law is that marriage is an economic partnership. Upon the dissolution of that partnership, the assets and liabilities that were accumulated during the marriage are divided between spouses.

Marital property includes all property acquired by either or both spouses during the marriage and before the execution of a separation agreement or the commencement of a matrimonial action.

Separate property is all property acquired before the marriage or property acquired by an inheritance, gift from someone outside the marriage, compensation for personal injuries, property acquired in exchange for or the increase in value of separate property and property described as “separate” in a pre or post nuptial agreement.

Finally, if one spouse used separate property, such as funds earned before the marriage, a gift from a parent or relative, or funds received from an inheritance or a personal injury award, toward the purchase of an asset, that spouse can be reimbursed for the separate property they used toward the purchase of that marital asset.

Assets include personal property such as bank accounts, cars, household furnishings, pensions, and retirement accounts; real property such as houses, camps, or land; and intangible property such as an interest in a business or a professional practice.

Liabilities include credit cards, bank loans, taxes and any other debt incurred during the marriage, regardless of whose name it is in, or which spouse incurred the debt.

The Equitable Distribution Law does not require marital property to be distributed equally. Rather, it allows a court to divide such property “equitably”. While such property is often divided equally, and many couples do, the Equitable Distribution Law has 16 factors that are to be used in determining how this property is divided upon a separation or divorce. These factors include:

1. the income and property of each party at the time of the marriage, and at the time of the commencement of the action;
2. the duration of the marriage and the age and health of both parties;
3. the need of a custodial parent to occupy or own the marital residence and to use or own its household effects;
4. the loss of inheritance and pension rights upon dissolution of the marriage as of the date of dissolution;
5. the loss of health insurance benefits upon dissolution of the marriage;
6. any award of maintenance under subdivision 6 of this part;
7. any equitable claim to, interest in, or direct or indirect contribution made to the acquisition of such marital property by the party not having title, including joint efforts or expenditures and contributions and services as a spouse, parent, wage earner and homemaker, and to the career or career potential of the other party. The court shall not consider as marital property subject to distribution the value of a spouse’s enhanced earning capacity arising from a license, degree, celebrity goodwill, or career enhancement. However, in arriving at an equitable division of marital property, the court shall consider the direct or indirect contributions to the development during the marriage of the enhanced earning capacity of the other spouse;
8. the liquid or non-liquid character of all marital property;
9. the probable future financial circumstances of each party;
10. the impossibility or difficulty of evaluating any component asset or any interest in a business, corporation or profession, and the economic desirability of retaining such asset or interest intact and free from any claim or interference by the other party;
11. the tax consequences to each party;
12. the wasteful dissipation of assets by either spouse;
13. any transfer or encumbrance made in contemplation of a matrimonial action without fair consideration;
14. whether either party has committed an act or acts of domestic violence, as described in subdivision one of section four hundred fifty-nine-a of the social services law, against the other party and the nature, extent, duration and impact of such act or acts;
15. in awarding the possession of a companion animal, the court shall consider the best interest of such animal. A companion animal, as used in the paragraph, shall have the same meaning as in Subdivision 5 of Section 350 of the Agriculture and Markets Law;
16. any other factor which the court shall expressly find to be just and proper.

So, what does this mean? In short, if it would not be “fair” to divide the marital assets equally upon a divorce, they can be divided in a way that you feel is “equitable” after applying one or more of these factors.