Under the Equitable Distribution Law in New York, only “marital property” is distributed between spouses in the event of a divorce. Marital property is defined as any property acquired from the date of the marriage until the date of the signing of a separation agreement, or the filing of a divorce action.
The only exceptions are property received as an inheritance, a gift or the proceeds from a personal injury award related to pain and suffering. All such property, and any property acquired before the marriage, is considered “separate property” and is not subject to Equitable Distribution.
So why do I require full disclosure of ALL property, including separate property, when I mediate a separation or divorce settlement agreement?
Rubackin v Rubackin, a recent case in New York, provides a perfect example of why this is important. In that case, the court held that the wife was entitled to keep her entire pension even though it was earned during the marriage and was considered marital property. The reason? The husband had received a 2 million dollar inheritance, which was clearly his separate property, and the court did not feel he needed any of the wife’s pension.
Under the Equitable Distribution law, the court is not required to divide marital property equally; rather it is required to do so “equitably” using the various factors found in the statute. In its decision, “the Supreme Court considered each of the statutory factors of Domestic Relations Law § 236(B)(5)(d) and adequately based its pension determination upon the defendant’s role in recent years as the parties’ primary wage earner and the primary caregiver to the parties’ children.” Thus, it did not have to award any of the pension to the husband.
Further, the court held that “the Supreme Court properly considered the plaintiff’s receipt of a $2 million inheritance in arriving at its pension determination.” In short, the court felt that it would be “equitable” to allow the wife to retain 100% of a marital asset rather than divide it with the husband, since it felt that he had enough to meet his needs without taking any of the wife’s pension.
Although my mediation clients sometimes wonder why they need to disclose separate property, this case provides a perfect example of why I require it. The full disclosure of all of their assets and liabilities, including separate property, allows them to reach the best possible agreement under the circumstances. After all, that is the ultimate goal of mediation.
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One wonders, if the positions of the divorcing marital couple cited in the exemple given here were reversed, i.e., the wife was the party inheriting a $2,000,000 windfall and the husband was the party receiving the pension, would this court have made the same decision and order?
The experiences of countless men in Family Courts and various versions “Courts of Equity” in the States, strongly suggests otherwise.