In New York, marital property is equitable divided. Thus, you need to consider two issues in dividing your property. The first is: what is equitable. The second is: what is marital property.
What is Equitable
The first issue is often the easiest. In the vast majority of case, marital property is equally divided in New York. New York public policy values the contributions of a wage earner and a homemaker equally in the accumulation of property. Thus, unless there is a compelling fairness argument to be made, a New York Court is not likely to divide property in any other manner. In attempting to negotiate an agreement, most individuals find that a simple agreement to equally divide property is what works.
Equally dividing property does not mean that each piece of property has to be equally divided. If you have $50,000 in assets, you would ensure that each party took $25,000 in assets. If one party takes the house and the other party takes other assets, that is fine. The equality of the bottom line on the ledger sheet is what matters.
What is Marital Property
In general, marital property is all property that is accumulated from the date of your marriage until the date you commence a divorce action or the date you sign a separation agreement, whichever is earlier.
Property includes vehicles, investment funds, bank accounts, collectibles, the value of a degree earned during the marriage, vested and non-vested pension and retirement benefits, stock options, cash value of life insurance policies, real estate, furnishings and jewelry, businesses, and so forth. If you are not sure if a particular item should be included as property, you certainly should inquire of your attorney to find out.
Property that is not marital is called separate property. Separate property includes gifts and inheritances, lottery winnings, and property owned prior to marriage. Sometimes, separate property is turned into marital property. The rules on these issues are not complex, but can seem unfair. For example, if Aunt Millie leaves you $20,000 and you put it into a joint account, but seek a divorce six months later, your spouse may well be entitled to one half of that inheritance. On the other hand, if Aunt Millie leaves you $20,000 and you put that money into a house in joint marital names, but seek a divorce six moths later, you may well be entitled to a full refund of all of that separate property.
Pensions/Retirement Funds
We have addressed pensions and retirement funds on a separate page. Please carefully review that page. If you are going to enter into a separation agreement and uncontested divorce, you must determine how your pension and retirement funds are going to be divided.
If you have defined contribution plans with any employer or defined benefit plans with the State of New York or General Electric, we will include the necessary language regarding those plans in your separation agreement. If you have defined benefit plans with other employers but will not be dividing those plans, we can also address those plans in your separation agreement. However, if you want to divide a defined benefit plan with one of those other employers, we cannot offer you our $895 uncontested divorce package. The potential complexity of the retirement plan documents and the potential risk to a non participating spouse if those documents are not reviewed or the available benefits not investigated is too great for us to undertake that obligation without doing more work that is contemplated in our standard uncontested divorce package.
If you still want to have us undertake your work, contact us and let us know what plan you have to have divided. We may be able to undertake a review of that plan and prepare your separation agreement and uncontested divorce at a cost that is still acceptable to you.
Debts
Marital debt must also be divided when you prepare your separation agreement. If the debt was incurred during the marriage, it is marital debt. It does not matter if that debt is in your name or your spouse's name. However, if you are agreeing to divide debt that is in both names, keep in mind that the creditor, i.e. bank or mortgage company, will not be bound by your agreement. Thus, if your spouse agrees to pay off a joint credit card debt but does not, the bank may successfully sue you for that debt. Try to fashion an agreement that does not leave you exposed to that issue.
Real Estate Refinance
If one spouse will retain the marital residence, consider how that will be accomplished. Can that spouse obtain financing in their own name. If not, is your name staying on the mortgage? How long will that last for? Who will do the paperwork. You can retain one attorney to represent both of you for the real estate transfer. That work is not included in our uncontested divorce package. In general, it is advisable for you to retain an attorney who is familiar with your local real estate practice to undertake that work.
When considering how the real estate will be divided, you must specifically address whether and how any tax or other escrow accounts will be divided. New York Courts do not consider those accounts to be the "proceeds of sale". Thus, simply provided for a division of the proceeds of sale will not get you back what you may believe to be your share of those funds. Also, if your spouse keeps the house and refinances with the same bank, or does not refinance, you might not see any of those funds back.
As with other issues, the rule here is to be careful and be explicit. If you do not provide for something in your separation agreement, you will not get it.
