On July 19, 1980, New York State became an Equitable Distribution state. Before that date New York State was a common law property state which meant that property was distributed based purely on title. If only one person’s name was listed on the title, only that spouse received the property in the divorce.
Since that date a court is obligated to divide marital property equitably which does not necessarily mean equally.
The easiest way to think of a New York State divorce is you are served a variation of ICED T
The “I” stands for Identification
The “C” stands for classification
The “E” stands for evaluation
The “D” stands for distribution and
The “T” stands for tax impaction.
Identification of all assets and liabilities of the parties is the first step. Before any division of assets and liabilities can be done, a court must know what each party owns and owes.
“C” classification means property is either “marital” or “separate”. Anything acquired from the day you say from the day you say “I Do” until the day you say “I don’t” (which is the day the summons for divorce is filed with a court) unless it’s an inheritance or a gift from someone outside of the marriage during a marriage, a personal injury award received during marriage or the exchange of separate property for new property acquired during the marriage.
Questions arise when separate property appreciates in value, creates income or becomes commingled with marital property.
The “E” stands for evaluation. All assets are subject to appraisal and the valuation date can be from the date the summons for divorce was filed until the date of the trial. The filing date not only cuts off the acquisition of marital property but it can be the valuation date for marital property.
“D” represents distribution. Equitable Distribution means the court has to decide how it will distribute each and every marital asset and liability.
There are 13 factors for equitable distribution in New York:
The “D” is distribution. In directing how the assets and liabilities are to be divided the court will consider the particular circumstance of the couple, whether it is impractical, burdensome or contrary to the law to split a particular asset, the court can make a “distributive award” which is a tax free award of money in exchange for an interest in an asset. Distribution of assets also involves consideration as to whether or not the marital home needs to be maintained for an extended period of time.
The “T” is for the consideration of tax impacting. Showing the tax basis is important whether you go to trial or if you are settling the issue.
In order to create the best possible result, it is imperative that you invest the time and resources to gather and to present accurate and complete facts before you start dividing assets or liabilities.