Shocking as it is, New York spouses may not understand how many assets or how much debt they have until a marriage ends. Other than divorce, there is usually only one other time when a formal collection, valuation and division of property take place -death!
Many spouses heading toward divorce do not have a thorough understanding of separate and marital possessions or their values over time. Separate property most often includes assets and liabilities a person owns going in to marriage.
Depending on state laws, individual property may also include a gift from an outside party to one spouse, inheritances and partial judgments from liability lawsuits. Separate property becomes marital property – and therefore equitably divisible — when couples combine assets, like adding a spouse’s name to a previously-private account.
Marital property is made up of all assets, income and debts that occur during marriage. Most spouses immediately think assets are homes, furniture and vehicles. They are, but the list is much longer than that. Marital property includes assets not exclusive to retirement plans, investments and real estate purchases, even when property is only in one spouse’s name.
New York divorce settlements are based on equitable asset division, which some spouses wrongly believe means equal distribution. Another mistake is basing a settlement on assets at present values. For example, keeping a marital home may seem like a victory until the spouse who gets it is faced with a huge maintenance or tax bill after divorce.
Divorce financial experts will help spouses understand asset values at the time of a settlement and the projected future worth. Remember, whatever you acquire at settlement becomes a solo financial responsibility – good or bad — after the divorce is final.
The majority of settlement disputes never end up in court. That’s why the expertise of attorneys and financial consultants are so critical during settlement negotiations, before the agreement becomes permanent.
Source: huffingtonpost.com, “Understanding How Assets Get Divided In Divorce” Jeff Landers, Jun. 14, 2013