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Susan E. Rizos, Esq. 22-55 31st Street, Ste. 206B Astoria, New York 11105
Phone: 718-777-5750 Fax:
718-777-5756 info@rizoslaw.com
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Division of Marital AssetsEquitable Distribution is the legal term used in New York for the law that describes
how assets should be divided in a divorce. This law came into effect in 1980 and continues to be the subject of
many Court decisions. Equitable does not mean equal and there is no rule that each party gets half of everything. The
first thing that must be done in any divorce case is to determine which assets are marital and which are considered separate.
Marital assets are those which will be distributed between the parties in some equitable fashion. Separate assets are
those which are not subject to distribution and will remain the property of one spouse. Marital property can
be defined as all property acquired by either or both spouses during the marriage regardless of how the property is titled.
This means that we must look at all property one or both spouses own, determine when it was acquired and where the funds to
acquire it came from. Separate property includes property that was acquired prior to the marriage, property acquired
through bequest, devise or gift, property described as separate in a written marital agreement such as a Pre Nuptial
Agreement, compensation received for personal injuries and property acquired at any time in exchange for separate property.
However, as with all areas of law, there are exceptions. For example, one spouse could have an interest in another spouse's
separate property if he or she contributed to its increase in value during the marriage or if marital assets were used to
maintain the property. In addition, separate property can be changed to marital if it is comingled (combined) with marital
property. Full financial disclosure is mandatory and requires both parties to complete a sworn Statement of Net Worth
and provide copies of tax returns and paychecks. Failure to comply with mandatory financial disclsure can lead to sanctions
being ordered by the Court or to an adverse decision being issued.
The Equitable Distribution statute enumerates the factors to be considered by the Court when determining a fair distribution.
Those factors are: - The income and property of each party at the time of the marriage and at the time of the commencement
of the divorce action.
- The length of the marriage and the age and health of the parties.
- The custodial parent's
need to occupy the marital residence and/or the household effects.
- The loss of inheritance and/or pension rights upon
the dissolution of the marriage.
- Maintenance, if any has been awarded.
- Equitable claims of the party not holding
title to the property in question.
- The liquid or non liquid character of all marital property.
- The probable
future financial circumstances of the parties.
- The problems associated with the valuation of assets, business interests,
corporations, licenses or professions and the desirability of a party retaining such asset free of claims of the other party.
- Tax
consequences to each party.
- The wasteful dissipation of assets by either spouse.
- Transfers or encumbrances
made in contemplation of a matrimonial action without fair consideration.
- Any other factor the Court finds just and
propert to consider in the particular case.
Many people are not aware that pensions, 401(k) plans, IRAs, annuities and other retirement accounts are subject to equitable
distribution. These accounts require special orders to be signed by a Judge to effecutate their division. These
orders known as Qualified Domestic Relations Orders (QDROs) are necessary to have monies in retirement accounts segregated
so that the titled spouse cannot deplete the account following the divorce. If a QDRO is not in place, one spouse can
liquidate the account and thereby destroy the other spouse's interest which may never be recovered.
Under New York law, professional licenses, professional practices (such as a law, medical or dental practice), advanced
educational degrees, corporate interests and property held in other countries is all subject to equitable distribution
as marital property. The key when dealing with these types of assets is valuation. Business valuations, enhanced
earnings determinations and appraisals must be obtained. Then, other factors must be weighed and the value must be adjusted.
For example, a major factor to be considered is the non titled spouse's contributions whehter monetary or through services
as a spouse, parent, wage earner or homemaker or through direct efforts to increase the value of the asset. Methods
of valuation vary and must be agreed upon by both sides or the valuation could be determined at trial with both sides putting
in evidence as to how they each have determined the value. After all property has been categorized and valued, a fair
distribution must be reached. What is fair depends on the assets involved, the financial position of each party, the
length of the marriage, and all of the other factors outlined above. The distribution itself may involve the retitling
of property, the payment of a lump sum, the sale of certain assets and division of the proceeds, a payment arrangement that
includes a series of payments over time or a lump sum payment. Equitable distribution is often the most difficult
issue in a divorce action. Skillful negotiation and sound economic advice are important at arriving at terms which all
parties find amenable. When a fair compromise cannot be reached, a skillful litigator is then required. At the
law office of Susan E. Rizos, you will find an attorney capable of handling your divorce whether your case is settled through
negotiation or goes all the way to trial. Please call to set up an appointment for a consultation to discuss your particular
situation in detail.
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