Long Island Division of Assets Attorney

Dividing Assets in Divorce

Equitable Distribution of assets is based upon the New York Domestic Relations Law. There are a few basic principles in dividing assets—what you came into the marriage with is typically protected and/or you’ll receive a credit back for it.

What was accumulated during the marriage generally is divided between the parties. While the division of assets is usually categorized as a 50/50 or “equal” split, a common principle recites that “equitable does not mean equal.”

How Is Debt Divided in Divorce?

Debt is a hotly litigated topic, especially during times of economic struggle. Debt accumulated during the marriage is often shared between the parties, at a rate to be agreed upon or litigated. The most common divisions are 50/50 to share all marital debt and/or to apportion the debt on a pro-rated basis commensurate with each party’s income.

How Are Business Assets Divided in Divorce?

If a business was created prior to the marriage, it’s deemed a separate asset. However, any active contribution during the marriage that increased its value may be partially deemed a marital asset subject to equitable distribution.

If a business was created during the marriage, the asset will be deemed marital in nature. However, each spouse’s contributions will be assessed in determining the portion by which it will be divided in a divorce proceeding. New York Courts typically will award (to the non-business spouse) 10-30% of the business value as the portion in which a marital business can be equitably divided in a divorce settlement and/or litigation.

What Happens to Retirement Funds in Divorce?

Retirement funds after a trial can only be divided by the court’s order of a Qualified Domestic Relations Order (“QDRO”), which is a financial vehicle to equitably divide the marital portion of the retirement account without triggering a taxable event. The QDRO for a pension/retirement plan is determined by each party’s contribution (and/or length of service with the employer funded pension plan) and is calculated by the financial institution.

For all retirement accounts with a defined contribution plan (i.e., 401(k), IRA, 403b, etc.), the monthly statements of the value will provide the necessary information to calculate each spouse’s marital portion of the account. Additionally, retirement monies are typically subject to the gains and/or losses of the stock market through the date of the distribution to the non-titled spouse.

Divorce Assets Acquired before Marriage

The burden to prove assets acquired prior to the marriage is on the spouse alleging this. In the event you can show the asset was acquired prior to the marriage, and thereafter no marital monies and/or active efforts were contributed towards that asset during the marriage—then the asset, including passive appreciation, shall remain entirely separate in nature.

In the event that the asset was acquired before the marriage but thereafter maintained during the marriage, changed/altered/renovated during the marriage, lived in during the marriage, etc.—then the non-titled spouse has an equitable claim and can request to change the identification of the asset from separate to partially marital. This is an issue for the Court to determine. As practitioners, we have many ways to resolve these claims and/or, if necessary, litigate before the Court.

Do You Have to Split Assets in a Divorce?

No, you don’t have to split assets in a divorce. If both parties agree NOT to share in any assets during a divorce, they are permitted to do so. However, if one party is requesting to equitably divide an asset that is deemed marital in nature, the titled spouse cannot stop the non-titled spouse’s claim to the same simply because he/she does not want to share in that asset.

What Is the Penalty for Hiding Assets in Divorce?

The vast majority of divorce actions in New York State will require preparing, signing, and filing a “Statement of Net Worth” by each party, which is a sworn statement under the penalties of perjury, which outlines your simple background data, your income on a yearly basis, your monthly expenses, your assets, your liabilities, and an accurate representation of any assets or liabilities transferred out of your name within the recent history.

In the event, at any time, either party learns of the lies of the other party, under the penalties of perjury, there are legal remedies and recourse. Additionally, in the event of the learned lies AFTER the conclusion of your divorce, you will not necessarily automatically lose out on the hidden assets accumulated during the divorce.

Are Inherited Assets Protected from Divorce?

Inheritance in the purest form is protected property in a divorce and remains separate in nature. However, many inheritance gifts (i.e., real property, bank accounts, personal property) lose it’s separate identity when commingled or mixed into marital monies and/or dealings.

The most important aspect to inheritance is to keep the asset entirely separate from all other marital monies and/or dealings. If the inheritance has not remained separate from marital monies, then it is my role to identify and advocate for the portions that have remained marital versus separate.

Division of Assets Agreement

The division of assets is a sizable portion to every Stipulation of Settlement and/or Separation Agreement. If each party is keeping his/her own individual assets/debt, then the identification of the same is still required in a formal agreement.

In the event of extensive divisions of marital property, then a divorce agreement will specifically identify the marital values and marital portions. It will also clearly state how the transfer of property shall be completed. Most if not all division of marital assets is a tax-free transfer and does not trigger a notification to the IRS for a taxable event.

Do I Need a High Asset Divorce Lawyer?

When choosing a lawyer to manage your high asset divorce, it’s imperative that your lawyer have a broad array of knowledge in the inner workings of the assets with which you are dealing. I’ve represented many spouses with complex financial portfolios, and it’s important to consider how the assets and debts all impact the remainder of your net worth.

For example, tax implications are important consequences to dividing assets, and financial planning is important for advocating/negotiating the best outcome in your divorce. For that reason, we use a collaborative approach with the experts you need to consult with to ensure that the division of the assets meets all of your needs.