New York Equitable Distribution & Divorce: FAQ

When a couple divorces in New York, judges divide property equitably, which can result in an equal property division, but not doesn't always. Instead, the basis for an equitable property division is what a judge determines is fair, considering what each spouse contributed to the marriage and what each spouse will need to move forward.

This article answers some common questions about New York's equitable distribution system. For more information, see the article New York Divorce: Dividing Property.

What Is Equitable Distribution?

Equitable distribution is a method for dividing a married couple's property when they divorce. Prior to the adoption of equitable distribution in New York, New York was a "common law property" state—meaning, the court distributed the property owned by either spouse in the divorce according to who held the title. If only one spouse's name appeared on the title, that spouse received the property.

New York is now an equitable distribution state. When a spouse files for divorce, the court must divide marital property equitably or fairly. But equitable doesn't necessarily require an equal split of the couple's assets. Instead, the judge will strive for a fair outcome, considering:

• each spouse's income and property when they married and when they filed for divorce
• the duration of the marriage
• each spouse's age and health
• the need of the parent with custody to live in the family home and use or own its effects
• the pension, health insurance, and inheritance rights either spouse will lose as a result of the divorce, valued as of the date of the divorce
• whether the court has awarded spousal maintenance (alimony)
• whether either spouse has an equitable claim to marital property to which that spouse does not have title, based on that spouse's contribution of labor, money, or efforts as a spouse, parent, wage earner, or homemaker, including contributions to the other spouse's earning potential (by, for example, working to put the other spouse through school)
• the liquid or non-liquid character of all marital property
• the probable future financial circumstances of each spouse
• if the marital property includes a component or interest in a business, corporation, or profession, the difficulty of valuing that interest and whether it would be desirable for that interest to be retained intact, free from claims or interference by the other spouse
• the tax consequences to each spouse
• whether either spouse has wastefully dissipated marital assets
• whether either spouse has transferred or encumbered marital property in contemplation of divorce without fair consideration, and
• any other factor the court expressly finds to be a just and proper consideration. (N.Y. Dom. Rel. § 236 (B)(5).)

What Property Is Subject to Equitable Distribution?

Under New York's divorce laws, courts only divide marital property, and spouses gets to keep their separate property.

Marital property includes all property acquired by either or both spouses during the marriage, regardless of who bought it. Examples of marital property include:

• each spouse's income earned during the marriage
• the property purchased with either spouse's income
• the property the couple purchased while married (such as a house or car)
• the retirement benefits each spouse earned during the marriage, and
• the appreciation of marital property while the couple was married. (N.Y. Dom. Rel. § 236 (B).)

What Is Separate Property?

Courts do not divide separate property when a couple divorces. Instead, each spouse gets to keep their own separate property, except to the extent that the other spouse contributed to the property's increase in value. Separate property includes:

• property either spouse acquired before marriage
• property either spouse received individually as an inheritance or gift, except from the other spouse
• compensation for personal injuries to either spouse
• any property characterized as separate property in a valid prenuptial agreement or other written contract, and
• property acquired from the proceeds or appreciation in value of separate property unless that appreciation is partly due to the efforts or contributions of the other spouse. (N.Y. Dom. Rel. § 236 (B)(d).)

Is a Business or Professional Practice Subject to Equitable Distribution?

Yes. Businesses, professional practices, and enhanced earning capacity attributable to the attainment of a career, or professional license, educational degree, profession, or license is "property" the court will divide using equitable distribution in a divorce. However, as noted above, interests in a business or career may be challenging to divide, or it may be undesirable to do so.

In this situation, the court will typically award the actual business or practice to the spouse who is running it, and award the other spouse other property to make up the difference. (N.Y. Dom. Rel. § 236.)

How Is Property Divided in a New York Divorce?

In most cases, divorcing couples can reach an agreement on property division that meets both spouses' needs. The courts encourage couples to work together to decide how to split assets and debts. Generally, the judge will approve a settlement agreement if it's fair to both spouses.

However, if you can't agree on how to divide marital assets, the judge will determine whether each piece of property or debt belongs in the "marital" or "separate" categories and will then divide the estate using the above-listed factors. If the couple signed a prenuptial agreement before the wedding, the court must adhere to the provisions in the contract.

If you'd like to negotiate a property settlement with your spouse, you can contact a mediator or arbitrator for help before you ask the court to decide for you.