In a New York divorce case, the Equitable Distribution Law requires that the court divide or distribute marital property in a manner deemed to be fair. It is important to initially make the distinction between what is marital property and what is separate property, as it relates to a marriage.
Types of Property
Marital property is any and all property obtained during the course of a marriage; it makes no difference which spouse specifically obtained the property or which spouse is listed as the owner. Separate property as it relates to marriage is not subject to equitable distribution, but is rather retained by the spouse who had ownership prior to the marriage.
In executing the distribution of marital property, the court is entitled to make considerations such as:
- What property each spouse brought into the marriage initially.
- The length of time the marriage spanned, as well as the age and health of either party.
- If there are dependent children, then who will be the custodial parent and retain the family residence.
- Any inheritable benefits that would be lost, such as pensions, health insurance benefits, etc.
- Whether there will be alimony payments from one spouse to another. In New York, this post-divorce form of spousal support is defined as “spousal maintenance.” Spousal maintenance can be used to compensate a spouse in situations of distributing any non-liquid assets that may be difficult to convert to cash, such as some types of stock or intangible assets such as patents, ownership of a trademark or brand, or interest in a business, professional licenses, and professional practices.
- The earning potential or outlook of the spouses influenced by their skills, experience, or educational and training background that would impact future opportunities for employment.
- The tax implications of both spouses.
- Any reckless or frivolous spending of assets by either spouse amid the divorce process, or questionable asset transfers.
Investments Eligible for Equitable Distribution
In a contested divorce, each spouse completes a Net Worth Statement which details any accounts such as:
- Retirement accounts
- 401(k)s or 403(b)s
- Profit sharing plans
- Deferred compensation plans
- Investment Accounts
- Stock Options
- Any assets transferred in the last three years
In New York State, accounts such as an IRA, 401(k), or other investment or retirement account in place during a marriage are marital assets that will be equitably distributed. This includes any interest or dividend earnings that were accumulated during the marriage. There may be some tax consequences or withdrawal penalties in distribution. It also may be possible to “rollover” distributions into another retirement account.
The New York high net worth divorce attorneys at the Law Offices of Paul A. Boronow, PC, are experts in the many complex financial aspects of a divorce in New York. Contact the office today at (516) 227-5353 for a complimentary consultation. You can have the confidence that your best interests are being represented and that you are in the best possible financial position for the future.