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How are investment properties divided in a New York divorce?

On Behalf of | Jun 22, 2023 | High Net-Worth Divorce

When going through a divorce, it is often difficult to divide assets. This is particularly true for investment properties. These can hold significant financial value and have the potential to appreciate over time, making the division process an even more complex task.

In New York, as in many states, the law requires the equitable distribution of marital property, which includes investment properties. But what does equitable distribution mean, and how does it affect the division of investment properties in a divorce?

Understanding equitable distribution

Equitable distribution does not always mean equal. Instead, it means fair. New York courts consider several factors to determine a fair division of investment properties:

  • The length of the marriage
  • The income and property of each spouse at the time of marriage and at the time of separation
  • The age and health of each spouse
  • The need of the custodial parent who lives in the marital residence
  • The actions of each spouse when dealing with the property, both before and during the divorce process

To properly divide assets and investment properties, authorities will look over everything cohesively.

Differentiating between separate and marital property

In New York, separate property includes anything you owned before marriage or received as a gift or inheritance during marriage. Any increase in the value of this separate property remains separate.

On the other hand, marital property includes all property acquired during the marriage, regardless of whose name is on the title. Any increase in the value of the marital property during the marriage is also considered marital property and subject to division.

Division of investment properties

How does this all play out when dividing investment properties? If you bought the investment property during the marriage with marital funds, it becomes marital property. If you owned the investment property before marriage or received it as a gift or inheritance, it is separate property, and the courts will not divide it.

But there is a caveat: any increase in the value of separate property due to the efforts of the other spouse or marital funds can transform into marital property.

Dividing investment properties in a New York divorce takes time and consideration, largely dependent on whether the property is separate or marital. It is important to understand these distinctions and factors to navigate this process smoothly.

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