What is Equitable Distribution?
Equitable distribution is a fancy term to describe how New York divides the assets and debts that married people have built up during the time they were married. The first step is to take an “inventory” of sorts – determining what assets or liabilities are of marital, as opposed to separate, character.
Only marital assets and debts can be split up by the New York courts. To be defined as marital, the asset or debt is acquired or incurred sometime at or after the day of the marriage and before the initiation of a divorce filing.
Exceptions of Equitable Distribution
There are some exceptions, which include “hybrids” such as:
This is a common example when one spouse owned something in his or her own name before the marriage and, during the marriage, placed the asset in joint names with the other person, or put the asset entirely in the other person’s name), and the increase in value of assets or paydown of debts that may have been separate at the time of the marriage.
A property that may have been owned by one spouse before the marriage, but actions taken during the marriage may create a claim by one spouse that the property has become, in whole or in part, marital and subject to the court’s jurisdiction).
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Resolving Valuation Issues
Once the “inventory” is established, which courts and lawyers refer to as the “marital estate,” it is necessary to obtain the value of the assets. Although often we think of assets and liabilities as being split equally, this is not always the case.
Valuation issues may be simple, such as a bank account which is worth exactly what the statement says it is worth, or more complex, such as unique parcels of real property or businesses having a fair market value even though it may be a small business that is not readily liquid.
The attorneys at Quatela Chimeri have unparalleled experience in complex valuation issues and look forward to guiding you through what can be a complicated process.
Distribution of Assets and Debts
Finally, once the marital estate and its value are known, great care must be taken to decide how to divide the assets and debts, or the values of those items, in a way that works best for both parties.
If an agreement is not achievable, a court will decide who gets what, and how the assets and debts will be distributed. A judge will consider all circumstances of the marriage to determine the fairest division of property and debt.
Often in high net worth families, numerous professionals are called upon to address the complexities associated with dissolution, similar to the way in which a commercial entity dissolves following irreconcilable differences between shareholders or owners. The firm’s experience in complex commercial litigation and transactions provides a superior foundation for the appropriate handling of high net worth divorce.
At Quatela Chimeri, we work cooperatively with the professionals with whom you have an established relationship, such as family accountants, trusts and estates counsel, established “family attorneys,” financial advisors, and consultants. In addition, we maintain a significant number of relationships with outside professionals—many of whom serve as expert witnesses or consultants in your case.
Additionally, in a fluctuating economy, it is vital for you to understand the full extent of a property settlement and to have short, mid, and long-term plans for yourself and your family.
We will explain the benefits and risks of each potential legal solution, including the potential future consequences of a flat-dollar settlement agreement today in tomorrow’s economy.
In-Depth Review and Consultation
With our help, you will be able to make informed and reasoned decisions during an otherwise emotional time.