- 19
- May
2010
When it comes to dividing large assets in a high-net divorce, where no pre- or post-nuptial agreement exists, there is no easy answer to this question. This is especially true when either the husband or wife owned the property before the couple got married, and the other spouse now wants to share in the increased value or the profit if the asset is sold.
For example, consider the scenario where a wife inherited the family beach house in South Hampton prior to marriage. After a four-year marriage, upon divorce, who would get the beach house or its proceeds after a sale?
New York is an equitable distribution state, so property is typically split up by the court according to principles of fairness. The court considers factors, such as length of marriage and which assets were inherited or owned separately at the time of marriage, to arrive at an equitable division of property. While equitable does not mean equal, in general the longer the marriage, the more even the division of property. If a marriage is fairly short, the court tries to ensure that each party leaves the marriage in a similar financial position as when they entered it.
Applying these factors to the example, the family beach house would most likely stay with the wife upon divorce and the husband would have no claim to it or its profits upon sale.
In many divorce cases, however, a spouse is entitled to part of the income accumulated during a marriage from a separately owned asset, like a beach house that appreciates in value. The husband may have a claim for part of the beach house's appreciation, but the court will base the husband's share on the contributions that he made to help its value increase. These may be either direct or tangible improvements to the beach house itself or intangible help, such as participating as a homemaker or parent.
In addition, if the husband were to pay the mortgage on the couple's primary residence, for example, the court may consider this a commingling of the parties' assets since the wife had the advantage of not paying a share of the housing costs for the primary residence. Thus, the husband would be entitled to part of the appreciated value of the beach house.
Determining who would get the beach house in a high-net divorce in New York is not a clear-cut issue. If you are a wealthy individual and considering marriage, or you are at a point where divorce seems necessary, be sure to consult a New York family law attorney before you marry or divorce. A lawyer experienced in pre-nuptial agreements and divorce matters, especially the complicated area of asset division, may be able to help you determine the best course of action to protect your assets both now and in the future.
