Previously, we began looking at the divorce case of real estate magnate Harry Macklowe, and the allegation—disputes by his attorneys—that his wife of 57 years holds title to most of the valuable assets as a result of efforts he made back in 2008 to prevent creditors from touching his assets. As we noted, one issue that will certainly need to be resolved in the case is how the couple’s property should be classified.
In New York, property classified as marital is divided equitably between the parties based on a consideration of multiple factors. In the absence of a written agreement specifying otherwise, separate property remains separate in divorce. Under default rules, separate property is defined as property: acquired prior to marriage, by inheritance, or as a gift from someone other than a spouse; compensation for personal injuries; and property received in exchange for a spouse’s own contribution to the increased value of separate property.
Marital property, on the other hand, generally includes all property acquired by either spouse during the marriage, prior to the beginning of dissolution proceedings or the execution of a separation agreement. This is true regardless of who holds title to the property. Couples, however, may strike an agreement to modify these rules, though.
Marital agreements may be made either before or during the marriage, and are enforceable as long as they are in writing, signed by both parties and meet the requirements to entitle the recording of a deed. Marital agreements may include terms regarding the division and distribution of separate and marital property. For couples, marital agreements can serve as an important tool to protect their financial interests, but it is critical to work with an experienced attorney to properly draft and negotiate these agreements.
We’ll say more about this topic in our next post, and the importance of working with an experienced family law attorney to protect assets in divorce.