A Tale of Two Outcomes: Dollars and Divorce in New York
August 18, 2015
While some couples cannot afford to divorce in the still-struggling economy, some wealthy spouses in New York might actually prefer to get divorced now. Signs of an economic recovery are slowly emerging, so divorcing sooner than later could save the wealthy money in spousal and child support and division of marital assets. This may seem like a positive for those looking to protect their assets, but where there is a benefit to one party, there is often a detriment to the other.Poised for Recovery
In New York, assets in a divorce are divided according to equitable distribution principles. This means that separate property will remain with its owner, but absent a pre- or post-nuptial agreement, marital property will be divided fairly between the couple. In the case in which either the husband or wife was the main income-earner during the marriage, divorcing now would be more economical. Real estate values, executive salaries and other income, like bonuses and investments, are at an all-time low due to the current economic climate.
Since the court generally uses income and asset values at the time of filing, any judgments for child or spousal support would probably be less than if future income and assets’ values were considered. The same would be true if one spouse is buying out the other’s interest in a business or real estate holding. In the case of property division for the spouse who must contribute child or spousal support, finalizing a settlement now is better than later, assuming the market improves.Defeated by Divorce
For the partner who was not the primary wage earner, or who needs a certain level of financial support to be able to maintain the marital standard of living after a split, the timing for a divorce may also be crucial. This spouse might want to wait as long as possible to file for divorce in hopes that hefty bonuses will return or future income, such as stock options, will vest. Some couples might not be able to trade stocks during divorce proceedings, which can hurt their investment portfolios. The health of the local real estate market, which still remains unstable, is also important in determining asset values.
The court will use various factors to evaluate what fair asset division should look like for each spouse. These considerations may include income, length of the marriage, child custody or support, spousal support, conditional inheritance or pension rights, future financial circumstances and the liquidity of the property. Even though a distribution judgment may seem unjustified, a door may still be open to seek a modification to a spousal or child support order if the contributing ex-spouse’s wealth or salary increases substantially in the future.Different Outcomes, Different Solutions
For every divorce, two parties face different results and different paths. In fact, the results may be vastly different depending on the dollar amounts at issue and when the divorce is filed, so it is important to consider the potential economic impact for each spouse. No matter which side you are on, you have financial and legal solutions you can employ to ensure your monetary stability, both now and in the future. If you are considering filing for divorce in the near future, contact a New York family law attorney to discuss all available options for financial protection.