IS IT YOURS, MINE, OR OURS?

When spouses are moving towards separation or divorce, they will likely be concerned about how the property and other assets get split up.  Ideally, this issue should be discussed and agreed upon as soon as possible, to figure out what each person can afford, and how to budget appropriately post-separation.  In mediation, the parties decide these issues themselves, with the mediator assisting in analyzing each spouse’s income, anticipated expenses, and the assets that are available to be shared.

Speaking in generalities, property that was acquired during the marriage will be considered marital property to be divided between the parties “equitably”.  Under New York legal principles of Equitable Distribution, the division can be an equal share, but it may not be.  In a litigated divorce, the court will look at many factors to decide what is fair under the circumstances, such as the age, health, and financial disadvantages/hardships either party may face post-divorce, and numerous other factors including “any other factor the court shall expressly find to be just and proper”.  With this wiggle room, it is anyone’s guess what a judge might decide is a fair split for dividing the marital property.

Under New York law, the general principle is that property or other assets that were acquired before the marriage, including any gifts or inheritance, will be considered the separate property of that spouse.  However, a word to the wise, there can be many grey areas in classifying property or assets.  If separate property is mixed with marital property, it becomes “commingled” and can be a messy, time consuming accounting project.  For example, if Spouse W inherited money from her grandmother and put that money in a separate bank account in Spouse W’s name, but then added money earned from her job as an insurance agent into that account, it is a mixed account.  The account contains some separate property and some marital property. 

Another tricky issue can arise if property that was originally separate property is deposited into a joint bank account.  The court might decide that Spouse H who made these deposits into the joint account intended to share those amounts with his spouse, a concept known as “transmutation”.  Even though the money was originally separate property it presumptively became marital property by Spouse H’s actions.   

So, is it yours, mine, or ours? As your mediator I would ask “What do each of you think? and “Why?” Each asset is discussed until an agreement is reached where both parties are comfortable with the asset allocation decision.  Many prefer this process to having a judge make the decision, which may take months or even years to arrive at, leaving one or both parties feeling frustrated and unhappy with the outcome.

Yes, I am an attorney but I’m not your attorney and this article does not create an attorney-client relationship. This article is legal information and should not be seen as legal advice. You should consult with an attorney regarding your situation before you rely on this information.