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The state of New York has made some adjustments to the manner in which marital property is divided when a couple gets a divorce, with the rules now being equitable division of all property considered as marital property. The state does still use the analytic approach to evaluation of each particular asset, but the primary rule concerning whether the property is marital or separate is based on the time at which it was acquired. There are some types of assets that are still considered as separate property, such as proceeds from a personal injury lawsuit that are paid as compensatory damages for pain and suffering of the injured spouse. Proceeds that are received as recompense for property damage of co-owned vehicles and lost wages are still marital in most situations. This ultimately means that division of assets in a divorce are handled similarly to dissolving a business except for special concerns that involve dependent children or other financial obligations. Liabilities are also a part of the equation when personal equity is being determined, so the total assets can be affected by outstanding debts. This can easily become a complicated situation in many divorce cases that can usually be mediated effectively by your New York divorce attorney.
In addition to non-economic damages received in a personal injury lawsuit, many times there is a prenuptial agreement that controls maintenance of specific assets of one spouse. Many couples who marry have significantly different levels of personal property, especially when one spouse has inherited considerable assets that the other spouse cannot match. Prenuptial agreements are common when this differential exists at the time of a marriage, but the income those assets generate could potentially be proportionally claimed by the spouse who does not necessarily own those assets. Inherited funds are usually considered separate property. This class of property can also include vehicles or homes that were purchased prior to the effective date of the marriage, and many times can include significant down payments on homes that were purchased together during the marriage. When prenuptial agreements are not involved, each piece of property of both spouses is open for qualification and discussion among the individual divorce attorneys when an agreement is being negotiated.
This is normally called community property in states that do not take the itemized approach to determination of property status. It includes retirement accounts, bank accounts, and any savings that were generated as income during the marriage. In addition, wages are also considered marital property, as well as the value of any business that was established and prospered during the marriage. It is important to understand that value of each asset can be very important, especially if a valuable asset was in disrepair and restored by the labor or finances of a new spouse after the marriage. This could include home or vehicle repair, but can also include personal items such as antique furniture that were personal property updated in value after the marriage became effective. It is not necessary for a spouse to have a title with their name in order to claim a portion of the value of any property items if they can reasonably claim some level of equity.
Understanding Equity Values
Equity in marital assets is not always limited to discreet numbers assessing monetary worth of any item, and equitable does not necessarily mean equal portions. In fact, in most cases, actually dividing the property among the spouses is not practical and one spouse will effectively buy the other out of their portion of marital property or make a financial payment, or series of payments, that are intended to suffice as equitable disposition. However, there are divorces in which one spouse did not work but enjoyed a high standard of living as a benefit of the marriage. This maintenance consideration is usually determined by the court after reviewing a totality of the material factors in a divorce. One issue that can impact the final disposition of marital assets is the basis for the divorce. The actions of one spouse that generate the divorce proceeding can create a disadvantage for the filing spouse that could then be used to increase certain court orders regarding finances. This is why it is always a good decision to let your New York divorce attorney develop an acceptable agreement in advance of a court trial.