Equitable Distribution Analysis in a New York Divorce

This is the last post in our short series on equitable distribution.  The final step in an Equitable Distribution Analysis is distribution.  Marital property should be distributed “in a manner that reflects the individual needs and circumstances of the parties.”  Equitable distribution of marital property is intended to give effect to the “economic partnership” concept of marriage as is recognized in the Domestic Relations Law.  The idea of equitable distribution is based on the premise that a marriage is, among other things, an economic partnership that depends upon the respective financial contributions of the parties to their “joint enterprise.”

Where the parties have an economic partnership, equitable distribution of marital assets is appropriate.  In determining if there is an economic partnership in a marriage, a court should look at the direct and indirect contributions made by each spouse to their marriage.  Most often in New York divorces equitable distribution is roughly 50/50.  There are, of course, some exceptions to this general rule.

Where the indebtedness is incurred by one party for his or her exclusive benefit or in pursuit of his or her separate interests, the obligation should remain that party’s separate liability.  Conversely, if one party derives no benefit from the other expenses or debts, he or she should not be required to pay these.  Also, where a party fails to meet their burden of proof and fails to establish that the liabilities in question were for marital expenses, then they alone should be responsible for such debts.

The wasteful dissipation of assets is a factor that must be considered in equitable distribution.  Wasteful dissipation of assets is relevant in an equitable distribution analysis even if the party wastes their own separate property and not marital property.  This is because separate property of the parties is a factor in equitable distribution.

The party found to have committed waste can be penalized in equitable distribution. This is based upon the logic that conduct that unfairly prevents a court from making an equitable distribution of marital property should not be rewarded or tolerated.  Hence, the economic misconduct of wasteful dissipation of assets provides a basis for an unequal distribution of marital assets.

To redress the economic misconduct of wasteful dissipation a court “must consider the missing assets” in making its equitable distribution analysis and award.  Accordingly a Court should give a full credit for the amount of the assets that were wastefully dissipated.  The amount dissipated must be charged against the wasteful party’s equitable share.  The net result should be that the court should equitably distribute the assets “to the level it would have been” had the offending party not committed the wasteful dissipation.

Because all equitable distribution is not 50/50, people who are divorcing should retain an experienced Domestic Relations attorney who will be able to steer them through these complex legal issues.

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