By Brian Figeroux, Esq.

Dividing assets in a divorce is one of the most contentious aspects of dissolving a marriage. Many people assume that a divorce settlement means a 50/50 split of all assets, but this is not necessarily the case in New York State. Instead of community property laws, New York follows equitable distribution laws, which means assets are divided fairly, though not always equally.

This article provides an in-depth analysis of equitable distribution in New York, how courts determine a fair division of marital assets, and factors that influence who gets what in a divorce.

1. What Is Equitable Distribution?

New York is an equitable distribution state, meaning marital property is divided based on fairness rather than an automatic 50/50 split.

Equitable Distribution vs. Community Property

• In community property states, assets acquired during the marriage are split 50/50 regardless of circumstances.
• In equitable distribution states (like New York), assets are divided based on what the court considers fair, which may or may not result in an even split.

The goal of equitable distribution is to ensure fairness, taking into account factors such as financial contributions, earning potential, and economic needs.

2. What Property Is Subject to Equitable Distribution?

In a New York divorce, assets are categorized as either marital property or separate property.

Marital Property (Divided in the Divorce)

Marital property includes:

• Income earned by either spouse during the marriage.
• Homes, real estate, and vehicles purchased during the marriage.
• Bank accounts, stocks, retirement funds, and investments acquired after marriage.
• Businesses and professional licenses obtained during the marriage.

Even if an asset is only in one spouse’s name, it may still be considered marital property if it was acquired during the marriage.

Separate Property (Not Divided in the Divorce)

Separate property includes:

• Assets owned before the marriage, as long as they were kept separate.
• Inheritance or gifts received by one spouse individually.
• Compensation from personal injury lawsuits (except for lost wages).
• Property protected by a valid prenuptial or postnuptial agreement.

If separate property is mixed with marital assets, it may become marital property (a legal concept called commingling).

3. Does Equitable Distribution Always Mean 50/50?

No. While a 50/50 split may happen in some cases, courts determine what is fair, and that often results in an unequal division of assets.

For example:

• One spouse may receive a larger share of marital property if they sacrificed their career to support the family.
• If one spouse hid assets or wasted money, the court may award the other spouse a greater share.

Since each case is unique, courts evaluate many factors before deciding on the division of assets.

4. Factors Courts Consider When Dividing Assets

New York courts consider several factors to determine a fair division of property.

1. The Length of the Marriage

• Shorter marriages may result in each spouse keeping what they contributed.
• Longer marriages are more likely to lead to shared assets being divided unequally, especially if one spouse was financially dependent.

2. Each Spouse’s Income and Financial Status

• If one spouse earns significantly more, the lower-earning spouse may receive a larger share of marital assets.
• Courts consider earning potential, not just current income.

3. Contributions to the Marriage

• If one spouse was a stay-at-home parent while the other built a career, the stay-at-home spouse may receive a larger portion of assets.
• Non-financial contributions, such as raising children or supporting a spouse’s business, are also considered.

4. The Custody of Children

• The spouse who has primary custody of the children may receive the marital home or additional assets to provide stability for the children.

5. Wasteful Dissipation of Assets

• If one spouse recklessly spent money, gambled, or hid assets, the court may adjust the division to compensate the other spouse.

6. Health and Age of Each Spouse

• A spouse with serious health issues or limited earning capacity may receive a larger portion of marital assets.

7. Prenuptial or Postnuptial Agreements

• If a valid prenuptial agreement exists, the court will follow its terms unless it is unfair or signed under duress.

Because of these subjective factors, some spouses receive more than 50% of assets in a divorce settlement.

5. How Are Specific Assets Divided?

Who Gets the House?

• If both spouses contributed to the mortgage, the house is marital property and subject to equitable distribution.
• If one spouse has primary custody of the children, they may be allowed to stay in the home for stability.
• If neither spouse can afford to keep the house alone, the court may order it to be sold and the proceeds split.

What Happens to Retirement Accounts?

• 401(k)s, IRAs, and pensions earned during marriage are divided, often using a Qualified Domestic Relations Order (QDRO).
• If one spouse worked while the other stayed home, the court may award a portion of retirement funds to the non-working spouse.

How Are Businesses Divided?

• If a business was started during the marriage, it is marital property—even if only one spouse ran it.
• Courts may value the business and award a financial settlement to the non-owner spouse instead of forcing a sale.

Who Gets the Debt?

• Marital debt (credit cards, loans) is divided fairly, based on who benefited from the expenses.
• If one spouse racked up debt irresponsibly, they may be required to pay more of it.

6. Can Spouses Negotiate a Property Settlement?

Yes. Many spouses reach their own agreements on property division through:

• Mediation – A neutral third party helps negotiate a fair split.
• Settlement Agreements – Spouses draft and sign a legal agreement detailing asset division.

If spouses cannot agree, a judge will decide based on equitable distribution laws.

7. Conclusion

While many assume a New York divorce results in a 50/50 split, the reality is that equitable distribution does not guarantee equal division. Instead, courts divide marital property based on what is fair, considering factors like income, contributions to the marriage, child custody, and financial need.

• In some cases, a spouse may receive more than 50% of assets, especially if they were financially dependent.
• Marital property is divided fairly, but separate property is not included in the settlement.
• Spouses can negotiate their own settlements, but if they cannot agree, the court will decide based on equitable distribution laws.

To ensure a fair settlement, it is highly recommended that divorcing spouses consult with an experienced divorce attorney who can help navigate New York’s complex asset division process.