LAW & MEDIATION BLOG
July 24, 2018
Equitable Distribution is the method by which the courts of New York distribute marital property. Equitable does not necessarily require an equal split. If spouses litigated the court would consider 14 factors (insert link) when deciding the split for them. In mediation, spouses can consider these factors or develop their own definition of an equitable split based upon their family values and beliefs.
The first step in either process would be to identify the property owned by the spouses. Property could include: cash, checking accounts, savings accounts, security deposits, securities, pensions, retirement accounts, stock options, business interests, cash surrender value of life insurance, vehicles, real estate, interests in trusts, contingent interests, household furnishings, jewelry, art, antiques, precious metals, tax shelter investments, collections, judgments, causes of action, patents, and trademarks, brokerage accounts, notes, mortgages, stocks, loans and credit card debt.
The second step is to categorize whether the property is marital property or separate property. Marital Property in the state of New York is all Property (asset or liability) acquired by either spouse during the marriage, irrespective of the title under which the Property is held. Simply put, if a bank account was opened during the marriage and is held in the name of one spouse the other spouse can still be entitled to the monies held in that bank account. However, if Property, for example, was acquired prior to the marriage or during the marriage by gift or inheritance that property could be considered that spouses Separate Property and may not be part of equitable distribution. Also, if Property was purchased during the marriage but with Separate Property funds that may also not be part of equitable distribution.
The third step is to agree upon an end date by which to value the Marital Property. In mediation spouses can pick a valuation date that is acceptable to both spouses. The date of valuation could vary with each asset/liability at issue. In contrast the court selects a valuation date for the spouses typically using any date between the commencement date of the matrimonial action to the date of trial.
In mediation, the fourth step is for spouses to determine what is an equitable split based upon their own beliefs and values. In contrast the court would determine the split considering the following factors:
NYS Domestic Relations Law DRL §236(B)(5)
- the income and property of each party at the time of marriage, and at the time of the commencement of the action;
- the duration of the marriage and the age and health of both Parties;
- the need of a custodial parent to occupy or own the marital residence and to use or own its household effects;
- the loss of inheritance and pension rights upon dissolution of the marriage as of the date of dissolution;
- the loss of health insurance benefits upon dissolution of the marriage;
- any award of maintenance under subdivision six of this part;
- any equitable claim to, interest in, or direct or indirect contribution made to the acquisition of such marital property by the party not having title, including joint efforts or expenditures and contributions and services as a spouse, parent, wage earner and homemaker, and to the career or career potential of the other party;
- the liquid or nonliquid character of all marital property;
- the probable future financial circumstances of each party;
- the impossibility or difficulty of evaluating any component asset or any interest In a business, corporation or profession, and the economic desirability of retaining such asset or interest intact and free from any claim or interference by the other party;
- the tax consequences to each party;
- the wasteful dissipation of assets by either spouse;
- any transfer or encumbrance made in contemplation of a matrimonial action without fair consideration; and
- any other factor which the parties find to be just and proper.