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How can separate property become marital property in New York?

On Behalf of | Apr 23, 2024 | Property And Asset Division

New York is an equitable distribution state, which means that during divorce litigation, property acquired during the marriage is typically considered marital property and subject to equitable distribution between the spouses.

However, separate property may be considered marital property if it is utilized in ways that blur the distinction between separate and marital assets.

What is considered separate property?

In a New York marriage, separate property typically includes assets acquired by either spouse before the marriage such as the following:

  • Inheritance: Property or assets received by one spouse through a will or estate distribution after the death of a family member. In New York, inheritances are typically considered separate property and not subject to division during divorce.
  • Gifts: Assets given to one spouse alone, independent of the other such as from family or friends. In New York, these are typically separate property unless they’re mixed with marital assets or used for marital purposes.
  • Personal injury awards: If one spouse independently receives compensation through a lawsuit for damages incurred due to personal injury, such awards are generally considered separate property in New York and are not subject to division during divorce.

Other types of separate assets may include trust funds, property obtained in exchange for separate property, income from separate investments, post-legal separation acquisitions and assets excluded by prenuptial agreements.

When are separate assets considered marital assets?

Separate assets may be considered marital assets in a New York divorce if the following happens:

  • Commingling: If assets are combined or mixed with marital assets or if they’re used for joint expenses or investments during the marriage.
  • Transmutation: This happens when spouses intentionally convert separate property into marital property through agreements, actions or behavior during the marriage.

To better understand why separate assets may be ruled as marital assets in a New York divorce, it’s generally wise to seek personalized legal guidance. Making this effort can help to clarify the nuances of asset classification and help protect one’s rights during the equitable distribution process.