This is about property division in divorce in New York, including the general rule for New York property division, what effect the length of marriage and conduct of the parties has on property division after divorce in New York, how separate property works in New York, and treatment of the marital home and retirement plans in divorce in New York.
- What’s the general rule of property division (equitable distribution, community property, or legal title)?
- What effect does the conduct of the parties have on property division?
- What effect does the length of the marriage have on property division?
- Is there such a thing as separate property? What does it take?
- Any special rules for the marital home?
- How do retirement plans get divided?
What’s the general rule of property division (equitable distribution, community property, or legal title)?
New York State is an Equitable Distribution state. The marital assets and debts of the parties (marital property) will be divided in an equitable fashion. This does not necessarily mean equal, however. What it does mean is that, based on the particular facts of the case, the assets and debts will be divided in a manner that fairly represents the parties contributions to the marriage. For example, if assets were brought into the marriage, but have appreciated in value, the marital portion (the appreciation) would be subject to equitable distribution based on what contributions were made.
What effect does the conduct of the parties have on property division?
Ordinary misconduct does not have an effect on how marital property is distributed in the courts. If there has been a dissipation of assets, the courts will rule in a manner that compensates for the dissipation. For example, where a party was found to have committed economic fault by secreting assets, the trial court awarded the wife an amount equal to all of the funds that the husband had withdrawn from bank accounts and had concealed in order to avoid their distribution. Other dissipation of assets may include where a party has spent money on drugs, or on gambling, or on a paramour, or where a party has caused the other party to sustain permanent physical injury (a disability).
What effect does the length of the marriage have on property division?
Although there is no requirement that distribution of marital assets be on a 50-50 basis, in a marriage of long duration (20 years or more), the courts will generally try to divide the property as equal as possible. Again, however, the court may use its discretion to deviate from the “50-50″ basis, depending on whether or not their was any egregious misconduct perpetrated by a party. Conversely, the shorter the marriage, (a few months to a few years), the more the courts try to put the parties in the same or close to the same position as they were in before the marriage, or would have been if there was no marriage. In these short marriage (less than 10 years), the court may attempt to prorate marital property in accordance with the relative earnings of the parties during the marriage. The one who earned more, gets more; the one who earned less, gets less. In middle length marriage, there are no firm rules. If there are children of the marriage it is more likely to be treated like a long marriage with equal division most likely.
Is there such a thing as separate property? What does it take?
Yes, there is such a thing a separate property. Separate property is A. Anything brought into the marriage. B. Anything acquired during the marriage by gift or inheritance, and held in separate name. C. Proceeds of a personal injury award (such as from auto accidents, slip and fall, etc.). D. Disability pensions (but just the portion for disability, not the ordinary pension part). E. Anything purchased with the sale or trade of separate property.
Any special rules for the marital home?
Although there are no “special rules” regarding the marital home in a divorce, it is extremely rare for there to be anything but an equal division of the equity in the house. The courts can either order the marital house sold immediately, or, when there are children, the courts may order the house sold upon the emancipation of the children, or graduation from high school. The party with “custody” of the children will generally have the use and possession of the marital home until the sale. The court will take into account (1) whether the custodial parents living expenses would be less in the home, and (2) whether the children had lived in the marital residence all their lives. (3) whether other suitable housing in the same neighborhood was available at an affordable price. Again, the goal is to make an equitable distribution of the marital property. So, the courts may even grant one party the marital home, and grant the other party something else. Nothing is ironclad.
How do retirement plans get divided?
In New York, the law is that all forms of retirement plans, whether called pensions, 401ks, IRAs, profit sharing plans, or any other name, which are marital property, are subject tp being equitably distributed. All benefits which are part of a spouse’s retirement plans, to the extent that benefits accrued during the marriage and prior to the commencement date of the divorce action, are subject to equitable distribution. The courts use a formula (referred to as the “Majauskas” formula), to calculate the split. Under the Majauskas formula, the actual accrued benefit is multiplied by a fraction. The numerator is the number of months of the marriage, and the denominator is the number of months of employment with pension credit upon retirement. The accrued benefit is the benefit received by the spouse upon his/her retirement. Finally the result is multiplied by the percentage to go to the other spouse. In a long-term marriage this is usually 50%. For example: If the Husband’s retirement benefit is $1,000 per month and if the number of months of pension creditable service which occurred during the marriage is 168, and if the total number of months of pension creditable service is 240, then the amount to be paid to the Wife is determined by dividing 168 by 240, which equals 70%, and that figure is multiplied by 50%, resulting in a percentage of 35% to be paid to the Wife. The $1,000 total retirement benefit is then by multiplied by 35%, resulting in the Wife being entitled to $350 per month. The division of most retirement plans require that a judge sign a specialized court order called a “Qualified Domestic Relations Order.” This order must comply with a number of very particular rules and must be very specific in order to work.
Other issues in New York: