Divorce and Real Estate in NYC

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Dividing real estate in a divorce can be easy or messy, depending on how amicable the divorcing couple is towards each other. Often times, the parties will have a general agreement about who keeps the house or how it’s to be split, and a matrimonial attorney simply needs to paper the agreement.

If however the parties can’t agree on who gets to keep the property, or how the proceeds are to be split if it’s to be sold, then one needs to file a motion in court and have a judge decide on what’s fair. We’ll explain how a judge determines what’s fair and much more in the following article.

Who gets the house in a divorce?

The home is usually the primary marital asset, and as a result it is usually the most contentious one in divorce proceedings.
In more amicable divorce proceedings, the parties will mutually agree on a divorce settlement which decides who keeps the house or how the proceeds are split if it’s to be sold.

However, in the case of a disagreement, a hearing or trial will need to take place and the court will decide based on a whole host of statutory factors.

New York is an equitable distribution state

Unlike some states that are equal distribution states, New York is an equitable distribution state which means a judge will look at a number of factors when deciding the split of marital assets to ensure an equitable, or fair, outcome.

A judge may consider the following factors:
Income & property owned by the parties
Duration of the marriage
Age and health of the parties
The need for a custodial parent if there are young children
Loss of retirement funds, pensions or inheritance
Domestic violence
Tax consequences
Future financial circumstances
Direct or indirect contribution to the property

Indirect efforts could include joint efforts in building or maintaining the property, household services, being the primary caretaker of the children, contributing to the career of the other party, etc.

Marital vs separate property

Marital property is property that is owned together or acquired during the marriage whereas separate property is property that was acquired by either party prior to the marriage.

Keep in mind that there are exceptions to what is considered marital property. For example, inheritances received by either party during the marriage is still considered to be separate property, as are personal injury awards.

Pro tip: If you don’t have a pre-nup, then it’s important to deposit your inheritance into a separate bank account with just your name. Furthermore, you shouldn’t use your inheritance money to support the marriage, otherwise that money could be argued to be marital property vs separate property unless you have a solid pre-nup.

This means that condo you purchased before getting married is considered separate property, and will still be yours in the case of a divorce.

The appreciation in value of separate property can be claimed

It’s important to understand that the appreciation in value of any separate property is added to the marital pot of assets in a divorce proceeding.

For example, the spouse that isn’t on the title can make a claim that he or she made contributions or exerted effort in some way in order to lay claim to the appreciation in value of the separate property.

For example, the non-title spouse can claim that he or she spent lots of time with architects or contractors, or spent a lot of time cleaning the separate property, and thus claim the appreciation in value of the separate property.

Whether children are involved makes a difference

It’s often easier and more straightforward for a judge to decide the split on a marital home if there are no children involved. If however there are still young children living in the marital home, then one party may have to pay the other party to live in that house with the children for continuity purposes.

For example, let’s say one spouse is the primary custodial parent and this spouse can’t afford to maintain the home by him or herself, but wants to stay in the home so the kids can continue at the same school. Then the court might order both parties to co-own and maintain the marital home until the kids finish high school.

What is the earnings capacity of each spouse?

The court will look at each party’s earning capacity and history over the past few years. If one party doesn’t have much earnings capacity while the other party does, then the judge may order the earning spouse to pay a spousal support package which may include the housing expenses for the non-earning spouse (i.e. cost of a rental, buying another property for the non-earning spouse, etc.).

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