What is Equitable Distribution?
In any divorce where assets of the spouses are at issue, there will be division of such assets under New York Law governing equitable distribution. Equitable Distribution does not necessarily mean “equal shares.” It relates to a fair division of assets under the law. The first step is to determine what is a “marital asset” and what is a “separate asset.”
Marital assets are those that have been acquired during the marriage with marital funds. Marital funds include all monies earned while the parties are together, regardless of how earned or where deposited. So, if the husband bought a grandfather’s clock with his paycheck, during the marriage, his paycheck is considered marital funds, because it was earned during the marriage, and therefore, the clock is a marital asset. Extending the example to pensions: if a firefighter joined the service and got married on the same day, the pension that he accrues from that date until the date he files for a divorce is also a marital asset. If he joined the service before he was married, then the portion of his pension that accrued then would be his separate assets.
Separate Assets refer to assets accrued by the parties outside of the marriage. As indicated above, the marriage period begins from the date of marriage to the date of commencement (or date divorce is filed in the County Clerk’s Office). Everything acquired by the parties outside of those dates is a separate asset. If one spouse wins the lottery, during this period, the winnings are a marital asset. If the winning lottery ticket was bought outside of those dates, the winnings are a separate asset. However, there are some exceptions: if a spouse were to be given a gift during the marriage, that would generally count as a separate asset. As well as, if a spouse were to benefit from a personal injury award due to an accident, then most of that will be separate property, if none of the injury award was delegated lost employment wages. In the case of lost employment wages, that portion designated would be generally considered a marital asset.
It is important that you consult a lawyer when it comes to equitable distribution of assets during a divorce, because there are a host of other exceptions and carveouts to be considered in determining marital and separate assets. Courts may look to issues like commingling, transmutation and appreciation of assets, which are topics too involved to get into here.
Contact me today to schedule a consultation. I am proud to serve Putnam and Dutchess Counties, NY, and the surrounding area.