Equitable Distribution Does Not Mean Equal Distribution
If the parties are unable to reach an agreement as to the division of their assets, a court will decide how to equitably divide the marital assets. Ropiecki vs. Ropiecki, 94 A.D.3d 734 (2d Dep’t 2012). Disclosure of each parties’ assets (whether individually held or jointly held) is mandatory, and If one party fails to comply with those disclosure requirements, that may be taken into consideration in the Court’s distribution of the marital estate. See Mizrahi-Srour v Srour, 138 AD3d 801, 29 N.Y.S.3d 516 (2nd Dept 2016) (The court properly awarded 70% of the marital estate to the plaintiff wife as a result of the defendant husband’s failure to comply with financial disclosure requirements and his abandonment of the family business during litigation, resulting in the dissipation of the business as a marital asset).
Factors that may be taken into account in dividing the balance of the marital estate include:
- the length of the marriage,
- the parties’ relative income and property,
- and the awards of spousal support and the marital residence to one party. See, e.g., Doscher vs. Doscher, 137 A.D.3d 962, 27 N.Y.S.3d 231 (2d Dep’t 2016) (finding it to be an improvident exercise of the Supreme Court’s discretion to have divided the marital estate 50/50 and instead awarding 70% to the husband, where the wife had been awarded maintenance and exclusive use and occupancy of the marital residence, as well as due to the short length of the marriage and the parties’ relative income and property).
As set forth in DRL § 236(B), assets are not determined based solely upon title. Cease vs. Cease, 72 A.D.3d 1450 (3d Dep’t 2010). If a particular asset is acquired after the marriage and prior to the commencement of the action for divorce, it is presumed to be a marital asset regardless of which spouse’s name it is titled in.
If a spouse fails to offer evidence regarding the nature of the property, the entire amount will constitute marital property subject to equitable distribution. See Zufall v. Zufall, 109 A.D.3d 1135 (4th Dep’t 2013) (husband’s deferred compensation account found to be marital property where he failed to offer any evidence as to the amounts he contributed before and during the marriage); Mistretta v Mistretta, 138 AD3d 1075 (2d Dep’t 2016) (defendant husband failed to rebut the presumption that the marital residence, which had been deeded to him by his mother during the parties’ marriage and for which rent had been paid to his mother pursuant to a written agreement, was marital property).
Stocks, real estate, and retirement assets are the most complicated assets to divide. It is vital that a reputable company specializing in such appraisals values all retirement assets in order to avoid a situation where one party receives a lopsided settlement or division due to the subsequent tax consequences. You should always try to make sure that you hire a CPA to answer all questions concerning taxes.
Real estate has become particularly troublesome due to the recent fluctuations in value. With many homes “under water”, Real estate may be valued less on the date of trial or decision than it was at the time of the appraisal. If there was no evidence to prove its value, there will be a problem concerning the equitable distribution of same. See Marcellus-Montrose vs. Montrose, 84 A.D.3d 752 (2d Dep’t 2011) for a thorough analysis of valuation and determination of marital versus separate property.
“Separate property which is commingled with marital property or is subsequently titled in the joint names of the spouses is presumed to be martial property.” Gately vs. Gately, 113 A.D.3d 1093 (4th Dep’t 2014). Depositing separate property, such as a personal injury award, into a joint account and co-mingling it with marital funds may result in it becoming marital property subject to distribution. Goldman v Goldman, 131 A.D.3d 1107 (2d Dept 2015).
Under the new Domestic Relations Law, enhanced earnings are no longer considered marital property subject to equitable distribution, though it may be considered as a factor by the court when fashioning equitable distribution.
It is imperative that you hire an experienced attorney to navigate through these treacherous waters, or, as you can see, the consequences can be severe. Contact our office now for a free consultation