One common question people ask when contemplating a divorce is who will get to keep the home. To answer that, you and your attorney must first determine whether the house is considered, under New York law, a marital asset or separate property.
Marital Property
Assets, including real property, that you obtain during your marriage are presumed to be marital property. This includes:
- Property you and your spouse bought during the marriage.
- Personal property like cars, boats, furniture, and artwork you and your spouse bought during the marriage.
- Cash, securities, bank accounts, retirement accounts, and pensions acquired during marriage.
- Gifts to each other.
So, at first glance, if you and your spouse both purchased the house during the marriage, subject to the exceptions below, it is considered marital property.
Separate Property
Separate property is any assets, including real property, cash, investments, or other assets you had prior to marriage. Separate property includes:
- Property either spouse obtained prior to marriage.
- The property you obtained, inherited, or which was gifted to you from someone other than your spouse during the marriage.
- Property described as separate property in a written agreement between you and your spouse.
- Property acquired during the marriage, in exchange for separate property.
It is important to note that separate property can become marital property if you are not careful. For example, if one of the parties purchased the home prior to the marriage, but during the marriage the other spouse contributed to mortgage payments and/or improvements, a portion of the equity in the home may be deemed marital and therefore, subject to equitable distribution.
Equitable Division
Equitable division is how marital assets are distributed during a New York divorce. If the parties cannot agree, a court is tasked with dividing the marital property equitably or fairly. However, equitable does not necessarily mean equal. The court is supposed to consider various factors, some of which include:
- The age of each spouse
- The health of each spouse
- Standard of living established during marriage
- The length of the marriage
- The earning capacity of each spouse
- Who has custody of the children?
- The probable future financial circumstances of the parties
Separate assets are not subject to equitable division. Also, if the couple signed a prenuptial agreement before the wedding, the court is supposed to adhere to the contract's provisions.
Common Options with Respect to a House
The three most common options include the following:
- The house gets sold to a third party and the proceeds are shared.
- One party buys out the other.
- The parties continue to jointly own the home. This option is popular when there are young children. One spouse will reside in the home with the children, while the other will move out. The divorced couple typically agrees that the house will be sold at some future date, often tied to the children’s ages.
