Prior to the passage of the Equitable Distribution Law in New York in 1980, New York was considered a “title state.” That is, whoever owned the property at the commencement of the action was considered that party’s separate property. Upon the passage of the Equitable Distribution Law, the Legislature established the presumption that regardless of whose name the property was entitled, if it was acquired during the marriage, then it is considered marital property. The concept is that both parties bring to the marriage assets, or an increase in value of those assets by virtue of their contributions to the marriage.
Further, for the first time, the law recognized the contributions of the “stay at home” homemaker by ascribing value to those efforts. Child-rearing, especially the sacrifices made in deferring a career to stay home with the child or children, acquired a quantifiable value. This principle applies to both spouses. This concept has particular significance in a same-sex marriage. No longer can one spouse claim to have a greater pecuniary interest in any family asset, simply because they were the spouse working outside the home, in an income-producing endeavor.
Over the past three decades, there have been thousands of cases which have defined and redefined the concept of equitably distributing marital assets. In fact, jurists in the Domestic Relations Court are supposed to apply thirteen statutory factors in their evaluation and distribution of marital assets. Many do not know that even the increase in value from separately owned property can be considered a marital asset subject to distribution. Since the family residence is one of the most valuable assets in a marriage, the increase in value over the years, due to either market forces or the contribution of either spouse, makes the marital residence one of the most important marital assets to be considered. The original down payment to purchase the home often times is merged into a marital asset to be distributed by the Court. However, if the down payment can be traced back to separate property, then that original down payment can be secured.
One of the other most important marital assets is the retirement pension. Both parties are presumed to have a 50% interest any pension acquired during the marriage. Most people do not know that the divorce Court can evaluate a retirement pension two ways, either on the basis of its lump sum, actuarial value, or the income stream realized when the titled spouse’s pension goes into pay status.
However, there are exceptions to the principle that all assets are marital are subject to Equitable Distribution. These exceptions pertain to separate property. The property that is brought into the marriage from prior funds is considered separate property. Additionally, monies that are inherited, or monies that are awarded for personal injuries are considered separate property, even if acquired during the marriage. Unions, municipalities, or private companies, have particularized rules about disability pay, disability pensions, and retirement pensions. How the pension is characterized by the employer often times dictates as to whether this is a distributable asset or separate property. Pensions are therefore a very technical area in which often times an expert is a called in to aid in its evaluation.