What is not considered marital property?

Property that is not considered marital is identified as “separate property” by law. Any property owned prior to the marriage is separate property. Inheritance proceed, in any form, such as real property, cash, stocks, and bonds, is separate property, whether it is received before or after the marriage. The settlement proceeds from a personal injury matter are the separate property of the spouse receiving the funds. Property acquired after the commencement of the divorce action is separate property, unless marital property was used to obtain it.

Can separate property ever become marital property?

There are some common pitfalls that people may be unaware of that may change separate property into marital property. For example, if one spouse receives a personal injury settlement and deposits the funds into a joint bank account with the other spouse, this separate property has become marital. The idea is that the receiving spouse has intentionally changed the ownership of a separate property from separate to marital by depositing it in a joint account where both spouses are titleholders and have the legal ability to access all the funds in this joint account. This concept also applies to inheritance proceeds. For example, if one spouse inherits a parent's home and decides to refinance the property to make improvements, and both spouses' names are the new mortgage, and the title is transferred into both names, the property has become marital.

Is marital property split 50-50 in New York State?

New York is an equitable distribution state. Equitable does not mean equal or a 50-50 split. Generally, the law provides that marital property should be divided equitably or fairly. Typically, a divorce will involve the division of equity in real property, retirement accounts, bank accounts, vehicles, and household contents. The exact division will be different for each case, taking into consideration the parties' goals and circumstances. Marital debt also must be equitably divided. In most cases, the interplay between the division of property and debt drives the resolution. An agreement reached between spouses is usually preferable over a decision by a judge after trial. If spouses are able to work together, they are usually more satisfied with the terms, which can incorporate details that a judge will not.

What Happens If A Spouse Cleans Out A Joint Bank Account Or Wastes Money After Filing For Divorce?

When a spouse is served with a summons for divorce, attached to the summons is a document titled “Notice of Automatic Orders.” This notice has the legal effect of a court order prohibiting a party from accessing any marital property and using it for any other purpose than is necessary for the ordinary course of business or meeting day-to-day needs. Cleaning out a joint bank account for unnecessary reason would be considered a “dissipation of marital assets.” The party who removed these funds would be ordered to replace them and/or give the other party a credit as part of any final settlement. If legal steps are required to force the offending spouse to rectify the loss, they offending spouse would be responsible for the other party's attorney fees.

If a spouse raids a joint bank account for extramarital purposes before a divorce action is begun wasteful dissipation of marital assets may be assumed, and the spouse would likely be held responsible for replacing this money at divorce time. For example, if one spouse spends money on a paramour, such as jewelry or vacations prior to divorce, those funds would be a credit to the other spouse at the time of divorce.

What If One Spouse Receives A Financial Windfall Or Incurs Significant Debt After Divorce Papers Are Filed?

A financial windfall after a divorce action (bonus, inheritance, winning lottery ticket) or a substantial liability (business loss, gambling debt) are not considered marital property. However, in determining a spouse's ability to pay support, these resources are relevant and must be disclosed.

Debts incurred after the divorce action are the separate responsibility of the spouse incurring the debt. This gets tricky when the person incurring the debt has used a joint credit card or line of credit. The non-responsible spouse must take all steps necessary to get their name removed from any liability for this debt. Simply saying “Oh, you pay the credit card balance until it's paid off” is not a good answer. MasterCard and American Express do not care what your divorce judgment says. If your name is on the account, credit card companies can legally go after you to collect, and failure to maintain the account properly will impact your credit.

What happens if one spouse has been found to be hiding a significant asset, such as stock or a concealed bank account?

If it's determined after a divorce has been completed that one spouse hid assets, the entire divorce can be reopened. This may also occur while the divorce is pending. In either scenario, the offending party may be subject to a contempt charge and be responsible for attorney and other fees incurred to uncover the asset, reopen the case, and bring this information to the court's attention. Judges have many tools at their disposal to punish a party for contempt, including fines, attorney fees and even incarceration.

How Does Domestic Violence Impact Alimony in New York?

Alimony, known as spousal support, is not designed to be a punishment. However, when the abused spouse is able to show that the abuse impacted their financial ability to be self-supporting due to the domestic violence, the court may award them alimony. 

spousal support is awarded only when the spouse has a reasonable need for it. That reasonable need may have arisen because of the domestic violence, i.e., the supported/abused spouse was unable to work or secure financial independence due to or in part due to the violence.