Divorce Litigation Guide (Part 16): Separate and Marital Property, Tax and Businesses
As a dedicated divorce attorney and family lawyer, Mr. Shapiro is fully committed to supporting his clients in their search for both professional assistance, and guidance. For those still unsure of what kind of professional backing may be necessary for their case, Mr. Shapiro produces online content and articles that aim to answer common questions and queries.
You can find many useful blogs on his blog and pages on this website. However, for those who don’t have time to search through all of the available content, these bullet point guides offer brief insights into common topics encountered during family law. For this particular guide, Mr. Shapiro has focused on the topic of divorce litigation. Part 16 of the resource looks at marital and separate property, and how it is divided in equitable distribution. This part of the guide also covers businesses, taxes, and how they apply to property decisions in the courts of New York.What Is Marital and Separate Property?
A crucial point that all couples must come to terms with when seeking a divorce, is how their assets will be divided at the end of their relationship. A marriage combines the assets and debts of two people in many ways, and “marital assets” are the ones that must be distributed between both parties.
- The New York Court defines marital assets as the assets obtained after the date a marriage begins, and before a separation agreement that divides property is executed or a divorce is started. The filing date of a divorce case can be a separation point where assets earned afterwards once again become “separate”.
- Separate property defines the assets and debts not included in an equitable distribution division. Domestic relations law identifies separate property as anything kept separate and acquired either before the marriage, or during the relationship through gift or inheritance. Separate assets may include those obtained after the filing of a divorce, or personal injury awards.
- The property distributed between parties in equitable distribution can include everything from pension and retirement benefits obtained during the relationship, to real-estate, vehicles, bank accounts, stocks, dividends, personal property and even aspects of a business.
- Determining the way that assets must be distributed in a New York divorce can be difficult. The courts need to consider a variety of things, including the current income of the spouse, the earning potential, age, and contributions that each person made to the relationship.
As Mr. Shapiro reminds his clients, equitable distribution will not necessarily split the assets in a divorce case 50/50 between couples. Anyone undergoing a divorce will need to think carefully about how they protect their assets and obtain their fair share of the items belonging to them.
- Working with a divorce attorney like Darren Shapiro will ensure that you have the right information to do your best to protect your assets during a divorce. This is particularly valuable in a high net worth situation, where it may be important to access tools like financial discovery, subpoenas, and depositions.
- Couples need to have a way of accurately valuing the assets shared between them in a divorce case. The correct valuation strategy will lead to a better discussion about the potential decisions made during equitable distribution. In a high net worth divorce case, this may mean that one party needs to provide information about assets and shares in a business or company. Getting a valuation of business assets may boost your chances of getting the right settlement at the end of a divorce case.
- When businesses are involved in divorce cases and a specific spouse started that business during the marriage, there are various points to consider. If the company continues to generate assets after the divorce, the judge will need to determine who should own that business, and how income should affect future company decisions.
- The court will typically award business ownership to the spouse that continues to run the company, particularly when it’s not feasible for the company to be run by the two former spouses. The spouse who doesn’t receive the business may be compensated with a “buy out”. Courts will also need to consider whether the maintenance is appropriate to be paid after the divorce to the other spouse.
There are usually various tax implications associated with the assets shared in a divorce case. These implications generally range from future income taxes to capital gains tax. Mr. Shapiro may recommend collaboration with financial or tax experts to help generate better insights into tax requirements during a divorce.
- The courts must consider the tax considerations, assets, and liabilities of each individual and couple when making decisions. Taxes paid on everything from home costs to businesses should be considered for accurate equitable distribution.
- Because every case is different, it’s difficult to know how certain cases will turn out in advance. However, Mr. Shapiro does his best to answer questions that couples might have regarding important questions arising during the divorce procedure. The couple may, for instance, need to determine who should be eligible for deductions for children involved in the marriage.
- Common settlement agreement language can often allow wives and husbands to file joint or separate tax paperwork for any year they continue to be married. If refunds are acquired, they may be delivered to one spouse, or another based on previous agreements made.
If you have questions about the foregoing, or how separate and marital property will influence you at the end of your marriage, read through the blogs or the pages on this website. You can also discuss your specific circumstances with Mr. Darren M. Shapiro through a video call, in-person conversations or phone call on (516) 333-6555. Contact the office to get on the calendar. Up to the first thirty minutes of your initial consultation is free.