How do judges decide disputed property issues?
In divorce cases, how often do judges decide who gets what?
What if the property obtained during the marriage is in the name of one party only?
How does a husband or wife keep his/her property separate and thus less likely to be lost in a divorce?
What is "equitable distribution of marital property"?
Who is likely to get the house?
What if the parties have a negative net worth--owing more money than they have?
What is alimony?
What is maintenance?
What is rehabilitative maintenance?
What is permanent support?
If one spouse supports the other through graduate or professional school, does the supporting spouse have a right to be compensated for increasing the earning capacity of the other spouse?
Does the law help newly divorced spouses who must now get their own health insurance?
Q : How do judges decide disputed property issues? A : As a starting point, parties may keep their "nonmarital" or "separate" property. Separate property includes property that a spouse brought into the marriage and kept in his/her own name during the marriage, and the proceeds that have accrued from such a property is treated as separate property. Separate property also includes inheritances received and kept separate during the marriage. It also may include gifts received by just one spouse during the marriage. After allocating separate property, the court divides marital or property. Marital includes property and income acquired during the marriage. Wages earned during the marriage would be marital property. A home and furniture purchased during the marriage usually would be marital property. Sometimes, pension rights are also considered as marital property.
Q : In divorce cases, how often do judges decide who gets what? A : Judges rule on major contested issues in only a relatively small number of cases. In many cases, the cost of pursuing a disputed property issue at trial will exceed the possible monetary gain of a victory in court. Most of people-often with help from attorneys-have reached an agreement between themselves which they present a judge for approval. If the agreement is fair, approval usually is granted. Nonetheless, the rules of law that a judge would use to decide a contested case influence the settlements that the parties reach. If it is predictable that a matter would be decided in a certain way, it is seldom worth taking the issue to trial.
Q : What if the property obtained during the marriage is in the name of one party only? A : That too usually will be marital property if it was paid for with marital funds such as wages. For example, if a wife buys a car during the marriage and pays for it with her wages, the car is marital property, even though it is in her name only. A pension also is usually marital property, even though it may have been earned by the labor of only one spouse during the marriage. A pension can be a very significant piece of property. The pension and the family home often are the most valuable assets acquired by a couple during the marriage. But if a pension was completely earned before the marriage, it probably would be separate property.
Q : How does a husband or wife keep his/her property separate and thus less likely to be lost in a divorce? A : The main way to keep your property separate is to keep it in your own name and not mix it with marital property. For example, if a wife came into a marriage with a $20,000 money market account and wanted to keep it as separate property, she should keep the account in her own name and not deposit any marital funds in the account. She should not, for instance, deposit her paychecks into the money market account, because the paychecks are marital funds and the deposit could turn the whole account into marital property. Another example: If a husband inherits some stock from his mother during the marriage and he wants to keep it as separate property, he should open his own investment account and should not use the account for any investments that he and his wife own together. If a husband or wife decides to use some nonmarital funds for a common purpose, such as purchasing a home, that money normally will become marital property.
Q : What is "equitable distribution of marital property"? A : That means a court divides marital property as it thinks is fair. States applying principles of equitable distribution also view marriage as a shared enterprise in which both spouses usually contribute significantly to the acquisition and preservation of property. The division of property could be fifty-fifty, sixty-forty, seventy-thirty, or even all for one spouse and nothing for the other (although that would be very unusual). Under equitable distribution, courts consider a variety of factors and need not weigh the factors equally. That permits more flexibility and more attention to the financial situation of both spouses after the divorce. However, it also makes the resolution of property issues less predictable. Following are major factors that are considered when the courts apply principles of equitable distribution:
- The income and property of each party at the time of marriage, and at the time of the divorce action.
- The duration of the marriage and the age and health of both parties. A longer marriage may be a factor in favor of a larger property award to the spouse with less wealth or earning power.
- The need of a custodial parent to occupy or own the marital residence and to use or own its household.
- The loss of inheritance and pension rights upon dissolution of the marriage as of the date of dissolution.
- Award of maintenance.
- Contribution made to the acquisition of marital property by the party not having title, including joint efforts or expenditures and contributions and services as a spouse, parent, wage earner and homemaker, and to the career or career potential of the other party. Who earned the property can be a factor favoring the party who worked hard to acquire or maintain the property.
- The probable future financial circumstances of each party. If one spouse has ill health or is significantly older than the other, that factor could favor a larger award to the sicker or older spouse.
- The impossibility or difficulty of evaluating any component asset or any interest in a business, corporation or profession, and the economic desirability of retaining such asset or interest intact and free from any claim or interference by the other party. If it is not practical to divide the marital property, the court will award a lump sum to one spouse instead of dividing the property between the parties.
- The tax consequences to each party.
- The wasteful dissipation of assets by either spouse. If a spouse wasted money during the marriage, that could count against him or her when it comes time to divide property. This factor is sometimes labeled "economic fault," and may be considered even by courts that do not consider other kinds of fault.
- Any transfer or encumbrance made in contemplation of a matrimonial action without fair consideration.
Q : Who is likely to get the house? A : That depends on the facts of each case. If the parties have children and can afford to keep the house, even though they will be living separately, the law usually favors giving the house to the spouse who will have custody of the children most of the time. If the parties cannot afford to keep the house, it may be sold and the proceeds divided (or perhaps given to one party). In some cases, there is a middle-ground approach: The spouse who has primary custody of the children will have a right to live in the house for a certain number of years. At the end of that time, that spouse will buy out the other spouse's interest or sell the house and divide the proceeds.
Q : What if the parties have a negative net worth--owing more money than they have? A : In that uncomfortable but common situation, the court (or the parties by agreement) will divide whatever property they have and then allocate the responsibility of each party to pay off particular debts if the debts incurred for both parties benefits. Where indebtedness is incurred by one party for his or her exclusive benefit or in pursuit of his or her separate interests, then the debts will be that party's separate liability.
Q : What is alimony? A : Alimony is money paid from one spouse to another for day-to-day support of the spouse with fewer financial resources. Alimony may be awarded even if the recipient has economic independence. At one time, courts commonly ordered husbands to pay alimony to their former wives until the ex-wives married again or died. Today, alimony is ordered by a court on the basis of one spouse's need or entitlement and the other spouse's ability to pay. Although most alimony payments are made from men to women, it is possible that a well-off woman could be required to pay support to her economically dependent husband. Alimony payment terminates upon the time fixed by a court order or the parties' agreement.
Q : What is maintenance? A : Maintenance is paid to one spouse when he/she lacks sufficient property and income to provide for his/her reasonable needs, and the other party has sufficient property or income to provide for the reasonable needs of the other. Maintenance is usually paid at fixed intervals for a definite or indefinite period of time, but the payment automatically terminates upon the death of either party or upon the recipient's remarriage. Maintenance is awarded less often now because there are more two-income couples and fewer marriages in which one person is financially dependent on the other.
Q : What is rehabilitative maintenance? A : Rehabilitative maintenance is a common type of spousal support. It is intended to provide a chance for education or job training so that a spouse who was financially dependent or disadvantaged during marriage can become self-supporting. Rehabilitative maintenance is usually awarded to a spouse to help make up for opportunities lost because he/she left a job (or did not pursue a career) in order to help the other spouse's career or to assume family duties. It also may be awarded to a spouse who worked outside the home during the marriage, but sacrificed his or her career development because of family priorities. Rehabilitative maintenance is usually awarded for only a limited time, such as one to five years.
Q : What is permanent support? A : Courts award permanent spousal support to provide money for a spouse who cannot become economically independent. The most common reason for ordering permanent maintenance is that the recipient, because of advanced age or chronic illness, will never be able to maintain a reasonable standard of living without the support. When deciding the amount of permanent support, courts often use the same criteria as for dividing property. Sometimes, New York courts also award permanent spousal support where the marriage was of long duration, one spouse sacrificed employment opportunities for the family, and his/her earning potential is far below the standard of living the couple established in the course of the marriage.
Q : If one spouse supports the other through graduate or professional school, does the supporting spouse have a right to be compensated for increasing the earning capacity of the other spouse? A : If one spouse supported the other through graduate or professional school, the supporting spouse is entitled to a distributive award as compensation if the educated spouse's obtained enhanced earning capacity. New York courts will award the supporting spouse a part of the value of professional licenses or any other forms of earning capacity. In such a case, the enhanced earning capacity of spouse will be treated as marital property, and will be subjected to equitable distribution between the parties. The amount awarded to the supporting spouse will be based upon the contributions of the supporting spouse to the educational expenses and general support of the spouse who leaves the marriage with an advanced degree or a professional license. The courts may change or end such payments if the expected increased earnings do not occur, but the payments are not ended by remarriage of the recipient.
Q : Does the law help newly divorced spouses who must now get their own health insurance? A : Yes. A federal law passed in the 1980s requires most employer-sponsored group health plans to offer divorced spouses of covered workers continued coverage at group rates for as long as three years. The divorced spouse of a worker must pay for the coverage, but the coverage is available.