Equitable Distribution
Garden City Law Firm

Am I entitled to ½ half of everything?

A common question when you are going through a divorce is what am I entitled to of the marital property (i.e. house, bank accounts, retirement funds, etc.) New York is an equitable distribution state. Under the Domestic Relations Law 236(B)(5)(a), “except where the parties have provided in an agreement for the disposition of their property… the court…shall determine the respective rights of the parties in their separate or marital property, and shall provide for the disposition thereof in the final judgment.”

When a party comes to our office, the first step in determining the marital property and how to effectively distribute it is to identify all the marital assets.

Identification of Marital Assets

Under DRL 236 B (4), mandatory financial disclosure is required for all income and assets without regard to whether it is marital or separate. Both parties to a divorce must complete and file a statement of net worth. If a spouse is not truthful or is hiding assets, our firm will use various discovery devices at our disposal including demands for interrogatories, discovery and inspection of documents, subpoenas, and motions to preclude. For a more detailed explanation of the discovery devices please see the Discovery section.

Assets may include, but are not limited to, cash, checking accounts, savings accounts, security deposits, securities, notes, mortgages, stocks, stock options, commodity contracts, broker's margin accounts, loans receivable, accounts receivables, business interests, cash surrender value of life insurance, vehicles, real estate, interests in trusts, contingent interests, household furnishings, jewelry, art, antiques, precious metals, judgments, patents, and trademarks, vested and unvested pensions, other retirement accounts and a portion of a disability pension.

In addition to the above mentioned assets, other intangible assets include; a professional degree, professional license, special training or skills which enhance the earning capacity of a spouse.

Once all the assets have been identified, it must be determined whether the assets are separate or marital property.

Separate v Marital Property

Domestic Relations Law 236(B)(1)(c) defines marital property as all property acquired by either or both spouses during the marriage and before the execution of a separation agreement or the commencement of a matrimonial action, regardless of the form in which title is held, except as otherwise provided by an agreement between the parties pursuant to subdivision three of this part.

Domestic Relation Law 236(B)(1)(d) defines separate property as (1) property acquired before marriage or property acquired by bequest, devise, or descent, or gift from a party other than the spouse; (2) compensation for personal injuries; (3) property acquired in exchange for or the increase in value of separate property, except to the extent that such appreciation is due in part to the contributions or efforts of the other spouse; (4) property described as separate property by written agreement between the parties.

There is a presumption that property acquired during the marriage is marital property. This is a rebuttable presumption, but the party seeking to prove an asset is separate property must present sufficient proof as to their claim.

Social Security Benefits

Social security benefits are not pension benefits and are preempted by federal law from being subject to equitable distribution, Principe v. Principe, 229 AD2d 522 [2nd Dept 1996] Such benefits, however, can be considered on the issue of maintenance.

Pensions/Retirement Accounts/401k plans/Keoghs/IRAs

The Court of Appeals, in Majauskas v. Majauskas, 61 NY2d 481 (1984), has determined that vested pensions acquired during the marriage are marital property. There are cases in the various Appellate Divisions that hold that all pensions, vested or unvested, matured or not matured, contributory or non-contributory acquired during the marriage, are considered marital property and are subject to equitable distribution. A profit-sharing plan, which is another form of deferred compensation that has accrued during the marriage, is marital property subject to equitable distribution.

In addition, the court held in Grund v. Grund, 151 Misc.2d 852 (Sup. Ct. Suffolk County 1991) that a Suffolk County police officer's SCAT benefits that he is entitled to receive upon retirement constitute marital property. SCAT benefits consist of payments upon retirement to a police officer for unused sick time, unused vacation time, personal leave, holiday time, extra days given to veterans longevity pay and unpaid compensatory time.

A profit-sharing plan, pension or any other asset that accrued in part before the marriage and in part during the marriage will be considered marital property only as to that part which accrued during the marriage.

A disability pension is treated as partially marital property and partially separate property for equitable distribution purposes. That part of the disability pension that represents compensation for personal injury is separate property, and that part which represents deferred compensation is marital property. The marital property part of the pension is that pension that the pensioned spouse would have received from ordinary retirement. Dolan v. Dolan, 78 NY2d 463 [1991]

A division of retirement benefits under an ERISA-qualified employee benefit plan is accomplished by means of a qualified domestic relations order (QDRO). A qualified domestic relations order is a judgment, decree, or order (including approval of a property settlement agreement) that creates or recognizes the existence of an alternate payee's right, or assigns to an alternate payee the right to receive all or a portion of the benefits payable to a participant under a retirement plan.