What is Equitable Distribition?

New York is an "Equitable Distribution" state.  Essentially what this means is that while property is usually divided equally, the courts may take into account other considerations such as separate property claims, valuation of property, and contribtutions made by either spouse towards the attainment or growth of property.  In sum,

New York courts are required to divide property fairly and equitably considering the following factors:

  • 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 custodial parent to live in the family home and use or own its effects (furniture and so on)
  • 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
  • any other factor the court expressly finds to be a just and proper consideration.

What property is subject to equitable distribution?

Only marital property is divided by the court. Each spouse gets to keep his or her own separate property.  Marital property includes all property acquired by either or both parties during the marriage, regardless of the form in which title is held, subject to the exceptions below.  Each spouse's income during marriage, the property purchased with that income, the property they purchased while married (such as a house or car), the retirement benefits each spouse earned during marriage are all considered marital property.

What is separate property? 

Separate property is not divided when a couple divorces. Instead, each spouse gets to keep his or her own separate property, except to the extent that the other spouse has contributed to its 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
  • 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. 

Is a business or professional practice subject to equitable distribution?

Yes. Businesses and professional practices can be considered "property" subject to equitable distribution. However, as noted above, interests in a business may be difficult 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, awarding the other spouse property to make up the difference. 

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