Distributing Financial Assets
If you are going through divorce, you may be feeling stressed about distributing financial assets with your ex. Talking to an attorney will be the best thing you can do in this situation. In the meantime, here is what you should know.
Distributing Financial Assets | Equitable Distribution
When a client comes into our Rochester office, they’ll often ask me how their property will be divided. I tell them that New York State law requires them to follow the principle of equitable distribution. That means their property – in whatever form – whether it be a house, retirement accounts, vehicles, bank accounts, and whatever debt they have will be divided fairly between the two parties. Equitable distribution does not always mean 50/50 distribution. The actual percentage could be different. It could be different working out of that formula. It simply means that the couple’s property, in whatever form, will be divided equitably or fairly between the husband and wife.
Distributing Financial Assets | Pension
When someone who has a pension – or someone whose spouse has a pension – comes into our office, they often ask what will happens to the pension. In New York State, the courts have devised a formula which sets forth how that pension is to be divided. The simplest way to explain it is this: If you have been married to your spouse for the entire time he or she has been working at the company that provides the pension, you would generally receive 50% of that pension.
The court considers two factors: how long you have been married and how long you have been married during the time when your spouse worked at the company whose pension is under consideration. It’s not an often-negotiated issue like some others where a formula is applied. The formula for dividing pensions is very cut and dry, and if you simply apply the formula, it will give you the exact amount you and your spouse will receive from the pension.
Distributing Financial Assets | Inheritance
Sometimes a client comes into our Rochester office saying they received an inheritance from their grandparents sometime in the past, or their mom or dad just died recently and left them a significant amount of money. In contemplating divorce, they want to know how that inheritance is going to be treated. The general rule is that an inheritance is separate property and not subject to being divided with your spouse.
On the other hand if, after receiving that inheritance, you have comingled the money with your marital funds or used it to purchase a house in the names of both parties, the argument is sometimes made that the inheritance (or separate property) has lost its separate character and is, therefore, subject to sharing between the parties. If you have an inheritance that is clearly separate, and the property is clearly located and clearly defined, such inheritances and other separate property are not subject to being shared with your spouse.
If you would like to know more, having further questions, or concerns, please call our Rochester divorce lawyers today to start discussing your options.