What Is Separate Property in a New York Divorce?

In New York, the division of assets during a divorce hinges on distinguishing between marital and separate property. Individuals entering a marriage often bring personal assets into the union, which under New York divorce law, are generally retained by the original owner post-divorce. However, the clarity of ownership can blur in long-term marriages, making it challenging to discern the nature of the property.

What New York Law States

Under New York law, separate property typically includes assets acquired before marriage, inheritances received by one spouse, personal gifts, and compensation for personal injuries. These assets remain with the individual upon divorce, provided they can be clearly identified and traced back to their origins as separate property.

What is Asset Tracing?

The process of asset tracing becomes critical when determining property rights during a divorce. Divorce litigants are required to meticulously document and trace their assets to demonstrate that these assets were not commingled with marital property. Commingling can occur when separate assets are used to purchase joint property, or when they are deposited into joint accounts, thereby potentially converting them into marital property.

This requirement underscores the complexity of managing personal assets within a marriage. Individuals must maintain careful records and keep a clear trail of transactions to ensure that their separate property remains classified as such in the event of a divorce. The intricate process of asset tracing in New York divorces emphasizes the need for meticulous financial management and may often necessitate professional legal assistance to navigate successfully.

A recent case in the third department is very informative.

The Case of Gwen Chernoff v Michael S. Chernoff

In a notable New York divorce case, the Supreme Court made crucial decisions regarding equitable distribution of marital property, child support, and the classification of separate property. The appellant, the husband, contested the Supreme Court’s handling of his child support obligations and the distribution of his property, which he claimed was misclassified as marital assets.

Key Decisions and Modifications in the Appeal:

Child Support Calculation Error: The Supreme Court initially set child support based on the husband’s income of $86,304, applying 17% to the first $80,000. This method deviated from the statutory process which requires considering the combined parental income, and applying relevant percentages to the first $80,000 and beyond, using statutory factors. The appellate court recognized this miscalculation and remitted for a correct computation of child support.
Equitable Distribution Controversy: The husband argued that the Supreme Court erred by including his separate property as marital property and by not crediting him for his contributions towards marital assets. Specifically:
- Pre-Marriage Assets and Investments: The husband entered the marriage owning significant assets, including real estate and stocks. During the marriage, proceeds from sold properties were invested in other assets, which the Supreme Court included in the marital estate.
- Commingling and Contribution Claims: The Supreme Court found that the income from these assets had been commingled with marital funds, leading to a 50% award to the wife from four mortgages and bank accounts, totaling $119,025.34.
Reversal on Separate Property Credits: The appellate court disagreed with the lower court on several counts, particularly noting that the husband’s pre-marriage property and the income derived from them should remain his separate property unless the principal was commingled, which was not the case here. It also highlighted that there was insufficient evidence that the wife contributed to the increase in value of these assets, which is necessary to claim a share in the appreciation of separate property.
Marital Residence and Other Property: Regarding the marital residence and an apartment house, the Supreme Court denied the husband credits for his separate contributions to these properties, deeming them gifts to the wife. The appellate court found this to be incorrect and modified the judgment to recognize the husband’s additional contributions.

The judgment was modified accordingly, and matters of child support and property distribution were remitted to the Supreme Court for further proceedings consistent with the appellate court’s findings. This case underscores the complexities involved in distinguishing between marital and separate property, and the importance of accurately calculating obligations based on statutory guidelines.

Appeal from a judgment of the Supreme Court (Peckham, J.), entered November 30, 2005 in Delaware County, ordering, inter alia, equitable distribution of the parties’ marital property, upon a decision of the court.

Hiring a Manhattan Property Division Attorney

If you’re facing the complexities of asset division in a divorce, it’s crucial to have a knowledgeable and experienced attorney by your side. Brian D. Perskin & Associates specializes in navigating the nuanced areas of New York divorce law, including the delicate process of distinguishing between marital and separate property.