So What’s Marital Property?

What's the difference between martial and separate property when getting a divorce?New Yorkers going through a divorce are frequently bombarded with terminology which sometimes can be overwhelming.  However, since you may be going through a divorce or know someone who is, it’s important to become conversant in the language of divorce.

The difference between “marital” and “separate” property is a basic concept in New York divorces.  Marital property is roughly defined as “all property obtained by either spouse during the marriage.”  Separate property is a bit trickier to define, but includes property owned prior to marriage that has not been combined somehow with marital property.  Examples include inheritances received (before or during the marriage), gifts received from third parties (i.e., not from your spouse), and awards for pain and suffering from a personal injury action.  Let’s break it down.

What’s property?  It’s not as obvious as you might think.  Obviously, property can be money, funds in an account, real estate, “things” like artwork, computers, furniture, clothing, jewelry, and anything else purchased during the marriage.  But property can also be things that might not automatically occur to you.  For example, stamp collections, coin collections, frequent flyer miles, intellectual property like patents or trademarks, copyrights, a right to receive royalties, commissions, or licensing fees.  But how about country club memberships?  How about season tickets at sporting events?

All of these things fall under the umbrella of “marital property” so long as they were acquired during the marriage.  We will save the task of valuing the property and how courts go about dividing it for another day, but the first step in any New York divorce is to identify the marital property.

You’ll notice I said, “during the marriage.”  What does that mean exactly?  Obviously, a marriage starts at the wedding ceremony.  This may be at the altar, or at City Hall — whichever comes first.  But when does the marriage end?

In New York, a marriage “ends,” for the purposes of equitable distribution, at the commencement of the divorce action.  A divorce action is “commenced” in New York by the filing of a summons with notice or a summons and complaint in the County Clerk’s Office.  Some people think that a marriage ends when the parties separate.  That’s not true in New York.

The court views a marriage as continuing until such time as a divorce action is commenced, at least for the purposes of determining marital property.  This may be an important consideration in determining whether or not to move forward with a divorce.  The court has great discretion in how it divides marital property.  It can, in fact, award nothing to one spouse should it so determine.  For the purposes of dividing the “marital pie”, the property is determined to be marital if it was acquired before the commencement of the divorce action.

As an illustration, there are cases in New York where couples separate, and years later, one of them wins the lottery.  When the other spouse learns of the winning and commences a divorce action, the courts have found that the lottery winnings are marital property, subject to division.  It then becomes up to the judge to decide how much, if any, the spouses will each receive.  So, it’s important to remember that marital property continues to accrue even after a couple splits.

In New York, there is a strong presumption that any property acquired during the marriage is marital.  Put another way, the party alleging that certain property is separate and not marital, has the burden of proving it.  So, for example, if a gift is received during the marriage from a third party and the question is whether the gift was made to the couple or to one of the spouses only, the court will assume it was made to both spouses.  It will be left to the spouse claiming the gift was made only to him/her the burden of proving that the gift was made only to them.  This comes up frequently in the case where parents/in-laws give money to help their child buy a first home.  Years later, when that child is divorcing their spouse, it’s quite common for that child to say that the gift was intended only for one of them, even though the house was bought in joint name.  The courts will scrutinize that situation, and frequently that party will be forced to prove, through testimony or documents, that the gift was not intended for both parties.

It’s just something to remember.

In future blogs, I will try to address what happens once marital property is identified, and how the courts go about dividing it.  In the meantime, if you’re married, look around. Ask yourself, if you had to sit down today and list out all the marital property — what would you leave out?

Donald R. Wall, Attorney at LawDonald R. Wall, Attorney at Law
(212) 695-6008
10 Park Avenue – Suite #2A
New York, New York 10016

Copyright 2012 Donald R. Wall, Esq.  Copying is prohibited; thank you for only quoting with a link back.