Equitable Distribution of Marital Property
Under divorce law in NY, Equitable Distribution is the division of marital property, the assets and debts acquired by a couple during marriage. In mediation, couples decide how to divide marital property according to their specific circumstances. With the help of a mediator, couples have the opportunity to think creatively in order to divide and trade assets in ways that could never be considered in litigation or adversarial negotiations. The goal in mediation is to work toward a fair outcome for both parties.
The first step in making informed decisions about how to divide property involves identifying what property is marital and what is separate. Separate property includes all property acquired before marriage or after the execution of a Separation Agreement or commencement of a divorce action. It also includes gifts and inheritances to one spouse from someone other than their spouse, an award from a personal injury action, the disability portion of a pension, any property that was purchased or traded with separate property and any property identified as separate in a valid agreement.
In mediation, couples will gather relevant statements and documents in order to determine operative dates and balance amounts for the purpose of defining what is marital and what is separate property.
Some examples of marital assets are: the marital home or other real property, bank, retirement and investments accounts, pensions, cars and other vehicles, furniture and furnishings, collections and the value of a business owned during a marriage. Some examples of marital debts are: a mortgage, lines of credit, credit card debt, student loans, and business loans.
The status of property as marital or separate can change. Under the law, if the value of separate property is increased due to the efforts of the non-titled spouse, the value of the increase may be deemed marital and subject to equitable distribution. Also, if separate property is co-mingled with marital property it may be deemed marital depending on why it was co-mingled. On the other hand, if separate property is used, for example, to purchase property and it can be traced back to the contributor, it will be deemed separate and not become part of the “pot” for equitable distribution.
In mediation, when dividing property, couples may choose to consult the guidelines set forth in NY’s Domestic Relations Law or they may determine what they feel is fair regardless of those factors. Some factors in the statute include: the income and property of the parties at the time of marriage, the length of marriage, the age and health of the parties, the need of the custodial parent to occupy or own the marital residence, the liquidity of the couples’ assets and the probable future financial circumstances of the parties.
Equitable distribution is one of many decisions to be made during divorce mediation.