A divorce is a stressful process, in part because of the financial challenges involved. Spouses generally need to prepare to divide their assets and financial obligations, a process that could very well damage their relationship and force them into litigation.
People often have a hard time agreeing with their spouse about what is the reasonable and fair way to share their assets and financial responsibilities during a New York divorce. Generally speaking, only marital assets and property are subject to division. The assets and debts that people can show are separate are often not subject to division. Depending on a couple’s circumstances, retirement savings accounts, checking accounts and credit cards held in only one spouse’s name may or may not be classified as separate property in a New York divorce.
The name on the account is not the deciding factor
Contrary to what many people believe, having a separate financial account does not automatically protect assets from inclusion in the marital estate. Unless there is a written agreement specifically setting those assets or debts aside as the property or obligations of one spouse, they will likely contribute to the marital estate during New York divorce proceedings.
It will be the date when someone added funds to the account or took on new debt that will typically determine whether someone can treat a resource as separate or marital property. A retirement account started before marriage could have some separate property and also some marital property depending on how much people contributed each year. Spouses will therefore need to disclose not just joint accounts but also separate accounts to their spouse and the courts as they prepare for divorce litigation.
Those who settle will have more control
Spouses can reach a mutual agreement about how they will divide their property and debts, and then they don’t have to worry about a judge making decisions that deviate from their expectations or agreements. Uncontested divorces filed by those who have reached an amicable compromise will give spouses control over the terms for property and debt division. Otherwise, a judge will have to review the household circumstances and then apply the New York equitable distribution statute based on their understanding of the marital relationship and the assets owned by the affected spouses.
Learning about the basic rules that govern property division in New York may benefit those preparing for divorce proceedings who are worried about protecting their finances. When it comes to legal matters, knowledge is power.