Whether you and your spouse have significant wealth, considerable debt or only a few assets, you need to know what happens to property when you divorce. After all, you and your soon-to-be ex-spouse likely have a keen interest in receiving as much of the marital estate as possible.
In New York, judges must apply equity principles when dividing assets at the end of a marriage. The equitable distribution approach gives each spouse a fair share of marital wealth, even if both individuals do not end up with exactly half of the marital estate.
Marital versus separate property
When a New York couple divorces, each spouse typically receives an equitable share of marital wealth. The same is true for marital debt. Every asset you and your spouse own, though, may not be part of the marital estate.
In the lead-up to your divorce, you should consider which property is marital and which is separate.
Generally, marital property is everything you and your spouse have acquired during your marriage. This includes real estate, cash, investment accounts, retirement plans, belongings and other items.
By contrast, anything you owned before walking down the aisle is probably separate property you can keep after your divorce concludes. If you received a gift or inheritance that specifically excluded your spouse, it is also likely separate property.
Furthermore, if a pre- or post-nuptial agreement classifies property as separate, you probably do not have to worry about dividing it during your divorce.
The power of negotiation
Even though judges in the Empire State must use equitable principles to divide marital wealth, you likely have some bargaining power. That is, if you and your spouse can reach an acceptable settlement, a judge is likely to defer to your bargain.
Accordingly, if you have some concern about losing assets that are important to you, it may be worthwhile to negotiate property division with your spouse. By making a good-faith effort to reach an agreement, you may be able to keep certain assets by giving up other ones.