Separate vs. Marital Property in a New York Divorce

Are you going through a divorce in New York? You might be eager to know what will happen to your assets and debts. The most important factor in asset division is whether an asset is considered separate or marital property.

At Levoritz Law Group, our property division attorneys are ready to help you understand your rights and protect what is yours during a divorce.

Understanding Separate and Marital Assets

When a couple gets divorced in New York, they must divide their assets and debts fairly. This does not mean the assets are always divided equally in a 50/50 split.

New York family court judges follow a process known as “equitable distribution.” The court will consider multiple factors, such as each spouse’s needs, their contributions to the marriage, and their career opportunities, before making a decision. But before this happens, the court must determine whether each asset is separate property or marital property.

Your separate property is anything you owned before the marriage. It also includes money or other assets that you inherited during the marriage or received as a gift meant only for you. As long as these assets are kept separate throughout the marriage, they should be yours to keep.

Marital property is everything you and your spouse acquired during your marriage, whether it's a house, a car, a bank account, or even a business. These assets are considered shared property built through the marital partnership, and they will be included during the equitable division process.

Similar rules apply to debts. However, some debts acquired during the marriage, such as student loans, may be considered separate or marital property on a case-by-case basis.

What Is Separate Property in New York?

In New York, separate property is owned by one spouse; it is not shared by the spouses and will not be divided during a divorce.

Here are some common examples of separate property acquired before a marriage:

• Real estate: Such as a house you bought before the marriage that your spouse never contributed to.
• Savings and investment accounts: Money you had saved before the marriage that your spouse did not have access to.
• Other property: Vehicles, collectibles, and other valuable items that you owned individually before the marriage and did not share with your spouse.

Some items acquired during a marriage are also considered separate property:

• Inheritances: Money or property you were bequeathed that you did not share with your spouse.
• Gifts: Gifts that were specifically addressed to you, except for gifts given to you by your spouse.

Additionally, prenuptial agreements might include specific assets that the spouses agree will remain separate property.

How Does Separate Property Become Marital Property?

Separate property does not always stay that way. If you use it in certain ways, it may become marital property. Here’s how.

Commingling of Assets

When assets owned by different people become intertwined, this is known as “commingling.” Commingled assets become marital property.

Consider this example: You had $25,000 in a savings account before your marriage. After the wedding, you transferred these funds into a joint account with your spouse. Over the next few years, you both contributed regularly to the account. You also occasionally took money out for vacations you went on together. This account has become marital property.

Using Separate Property for Marital Benefit

Sometimes, separate property is used for the benefit of both spouses during the marriage. For instance, suppose that you inherited $25,000 after a relative passes away. Initially, this is considered separate property. However, you use the money for a down payment on a home for you and your spouse.

Since you used the inheritance for something you shared with your spouse, it is considered marital property.

What Are Considered Marital Assets in New York?

Marital property is everything you and your spouse acquired together during your marriage. It's the result of your shared efforts and contributions as a couple.

With the exceptions of inheritances and gifts, assets acquired by either spouse or jointly by both spouses are marital property. This includes anything you buy, even if it’s with your own funds.

These are common examples of marital property:

• Real estate: Even if only one spouse's name is on the deed, a home purchased during the marriage is considered marital property.
• Gifts: Money or other gifts given to both spouses becomes marital property
• Retirement funds: Retirement savings accumulated during the marriage are often considered marital property, even if one spouse made more contributions.
• Business interests: Businesses that were started during the marriage are generally considered marital property.
• Bank accounts: Joint checking, savings, and investment accounts are marital property, regardless of who deposited the money.
• Personal items: Things like furniture, appliances, jewelry, and artwork acquired during the marriage are often referred to as "household property."

Even if marital property is in only one spouse's name, both spouses have a claim to it. This does not mean that it will be split in half; instead, it will be considered during the process of equitable distribution. For example, a judge might decide that one spouse keeps an investment account, while the other spouse keeps the marital home. 

Assets That Increase in Value

Assets acquired before the marriage, even if they significantly increase in value during the marriage, are usually considered separate property. However, the increase in value or any improvements made during the marriage could become marital property.

It's important to document your property and investments, including property that has increased in value. Consult a family law attorney in New York to determine the status of a specific asset and protect your interests.

Contact Levoritz Law Firm for Guidance

Untangling shared assets during a divorce is often very complicated. New York laws about equitable division, inheritance, and commingling of assets could make a big difference in your lifestyle after your marriage ends.

At Levoritz Law Group, our experienced divorce attorneys are ready to provide personalized legal advice and help protect your interests. Contact us today for a consultation.