Last Updated On: July 27, 2023

Test: Is New York State A Community Property State?

We know that filing for a divorce can be complicated. Along with the emotional turbulence you may face are a number of other issues to consider. And one of the main questions during the legal separation from your spouse is what happens to your assets and property

Speak to a reputable Manhattan divorce lawyer at Juan Luciano Divorce Lawyer before making any decisions. A skilled divorce lawyer may be able to help you understand the difference between equitable property state and community property state and their effect on your divorce. Contact us today at (212) 537-5859 to schedule a consultation.

What is a Community Property State

Community property states have their own distinct regulations governing the ownership and distribution of assets and debts within a marriage. These states consider the majority of assets acquired or earned, as well as debts incurred during the marriage, as community property. This implies that both spouses share equal responsibility, regardless of who made the purchase or earned the income, or even if a loan was taken solely in one partner’s name. However, it is worth noting that the presence of a prenuptial agreement can modify these conditions.

In the event of a divorce, community property is typically divided equally, although there are exceptions to this rule. If one spouse passes away, the portion of community property belonging to the deceased spouse generally transfers to the surviving spouse, unless otherwise specified in a valid will.

While the division of community property often involves selling and distributing the proceeds, couples who can communicate effectively may choose a more personalized approach that better suits their circumstances. Furthermore, in states that follow community property laws, both partners typically share equal liability for any debts accumulated throughout the duration of their marriage, irrespective of which spouse initially accrued them.

Community property laws may seem unjust when an individual going through a divorce is required to relinquish half of their retirement earnings and savings to their ex-spouse. However, these laws can offer support to individuals who are financially dependent on their partners, especially stay-at-home parents without independent sources of income and savings.

What Is New York Marital Property Law?

Every divorce is different and the property distribution may depend on many factors. But the NYC courts have certain guidelines to follow making decisions on the distribution of marital property.

New York is a non-community property state. Like another dozen states in the USA, NY follows the theory of equitable distribution. And while each spouse owns the income they earn during the marriage as well as the right to manage the property in their name, during the divorce one doesn’t simply get 50 % of the assets.

What Is Equitable Distribution Of Marital Property?

The term “equitable distribution” means the property will be distributed fairly between the two spouses. To determine the fairness of distribution during the legal separation, the court will take into account the following factors:

  • how long did the marriage last;
  • each partner’s conduct during the marriage;
  • the spouses’ health and age;
  • the spouses’ occupations and incomes;
  • the education, training, and skills of each spouse;
  • the spouses’ estate and liabilities;
  • the spouses’ likely financial needs;
  • the spouses’ ability to acquire assets and income in the future.

The court will also take into consideration whether the divorcing couple has children.

Dividing a House in a NY Divorce

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To divide the family home, it is essential to first determine whether it is categorized as marital or separate property. If the home was jointly purchased by you and your spouse after your marriage, it is considered marital property, subject to equitable division by the court. However, if the house was bought by one spouse before marriage and not put in the other’s name, it is classified as separate property.

In some cases, the family home may be classified as commingled property, which occurs when both spouses use their own separate assets to pay for the marital property. This situation makes dividing the property more complicated. It is recommended to seek assistance from an experienced lawyer to navigate this process effectively.

If separate and marital properties are mixed, a judge may merge them and divide them equitably, taking into account each spouse’s contribution. To safeguard your property from being part of the marital estate, a prenuptial or postnuptial agreement can be useful.

Division of Debts in a New York Divorce

Most people consider how assets will be split when they are preparing to divorce. They usually try to think about things like who will keep the house, or if they will have a share in the pension. These are the questions that clients usually have in their minds. Often, people don’t know that debts accrued during the marriage, like assets, must be divided.

Debts that are tied to an asset, such as a mortgage or loan to purchase a car, often remain with the asset. Whoever is keeping the house or the car, in this case, will be in charge of paying it off. Other unassociated or unsecured debts, like credit card debts, must be shared between the spouses and hopefully discharged as part of the divorce decree.

In most cases, marital debts are those incurred during marriage by either spouse. They also constitute equal obligations. However, there is some room for deviation if one of the spouses incurs debts that are not marital. For example, secret purchases made during extramarital activity would be a classic example. This debt will likely be the only obligation for the guilty party.

It is important to speak with an experienced divorce lawyer when dealing with matters such as the division of debts. Having a skilled attorney may be able to help the client understand their roles and responsibilities when it comes to asset division.

Type of Debt Responsibility
Debts tied to an asset (e.g., mortgage) Responsibility typically remains with the spouse keeping the asset
Unassociated or unsecured debts Shared responsibility between both spouses, discharged as part of the divorce decree
Non-marital debts Sole responsibility of the spouse who incurred the debt

What Is The Difference Between Separate And Marital Property?

To distribute the assets fairly the law requires determining the separate and marital property of the couple. To do that the court will study the financial documents of both spouses.

The equitable distribution law of New York defines “marital property” as all property gained by both spouses during the marriage. This includes the property held in the names of both spouses as well as the one in the name of one spouse. Such property will be distributed during the divorce process.

  • The “separate property” which will not be distributed during the separation is the following:
  • the property acquired before the marriage;
  • the property acquired by will, devise, or as a gift from anyone besides the spouse;
  • the assets acquired as compensation for the personal injury;
  • the property acquired during the exchange of separate property or through an increase in value of that property
  • the property which was described as separate property in a written agreement by both spouses.

The spouse claiming that certain property or asset is a separate property should provide proof supporting the claim.

Attorney Juan Luciano is an experienced lawyer who has helped many clients with property division during a divorce, including the division of a family home. He may be able to help you with your case. Contact us today to schedule a consultation.

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