USA – NEW YORK Law and Practice Contributed by: Gretchen Beall Schumann and Rashel Zywica, Schumann Law LLC
Property Regimes New York is an equitable distribution state, meaning the division of assets upon divorce is not necessar ‑ ily equal. Rather, a court will consider the 16 factors provided by statute to determine a fair and equitable division of assets. Trusts New York courts recognise trusts. The court may consider distributions from a trust in determining a party’s income. To the extent that mari ‑ tal assets have been utilised to acquire property held by a trust, that property might, in certain circumstanc ‑ es, be deemed marital property or result in distribution credits. The treatment of a trust depends largely on the cir ‑ cumstances surrounding the creation of the trust, as well as the terms of the trust. The case law varies regarding the treatment of trust assets in the context of equitable distribution. For example, where a trust was created by a non-party for the benefit of one spouse as an estate planning mechanism, or where both spouses knowingly and intentionally created a trust for the benefit of each other and/or their children, courts are more likely to treat the trust assets as outside the marital estate, while the trust terms remain intact. See Oppenheim v Oppenheim , 168 A.D.3d 1085 (2nd Dept. 2019). However, certain circumstances may warrant piercing the trust or granting an equitable distribution credit for marital assets contributed to a trust. This is espe ‑ cially so where marital assets have been placed into trust without one party’s consent, where such trans ‑ fers were made to defeat a spouse’s rights to access marital assets, or where the trust itself is invalid. See Riechers v Riechers , 267 A.D.2d 445 (2nd Dept. 1999); Surasi v Surasi , 2001 NY Slip Op 40408 (U) (Supreme Court of Richmond County 2001). 2.4 Spousal Maintenance Spousal maintenance is authorised by statute and is routinely awarded in divorce actions. The parties may also agree to the payment of spousal maintenance in a written settlement agreement. There has been a
• the impossibility or difficulty of evaluating any com ‑ ponent asset or any interest in a business, corpora ‑ tion or profession, and the economic desirability of retaining such asset or interest intact and free from any claim or interference by the other party; • the tax consequences to each party; • the wasteful dissipation of assets by either spouse; • any transfer or encumbrance made in contempla ‑ tion of a matrimonial action without fair considera ‑ tion; • whether either party has committed an act or acts of domestic violence against the other party and the nature, extent, duration and impact of such act or acts; • in awarding the possession of a companion ani ‑ mal, the court shall consider the best interest of such animal (“companion animal”, as used in this subparagraph, shall have the same meaning as in subdivision 5 of Section 350 of the Agriculture and Markets Law); and • any other factor which the court expressly finds to be just and proper. Financial Orders to Regulate or Reallocate Assets or Resources The court will typically determine whether a division of property occurs on an in-kind basis or whether it is appraised and a credit is given to the spouse who is not retaining the property post-divorce. The court considers the factors set forth in the response above. Identifying the Assets There is a financial discovery process whereby each spouse prepares a net worth statement identifying all assets and liabilities, and also engages in broad financial disclosure, exchanging documents such as income tax returns, bank account statements, broker ‑ age and investment account statements, real property records, business records and so on. Discovery may further include depositions, written interrogatories and discovery subpoenas seeking documents and/ or testimony. A court may issue disclosure orders directed to third parties.
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