When a couple gets divorced, most people understand that they will divide their property and assets during divorce proceedings. Houses, cars, collectibles, jewelry, and financial accounts are examples of the items couples must divide when they get a divorce. However, how are the benefits of a professional degree, license, or private practice divided? This blog discusses how New York law resolves property division issues arising from professional licenses and businesses.
New York Equitable Distribution Law
New York resolves property division issues according to the principles of equitable distribution. In the United States, the division of assets during divorce proceedings are divided according to either the equitable distribution system or the community property system.
Under equitable dstirubiton principles, all property the parties acquire during marriage is considered to be marital property subject to division upon divorce, unless facts show that the property in question is the sole nonmarital property of one of the parties. Nonmarital property includes all property acquired prior to the parties’ marriage and after their divorce. Furthermore, property that a spouse receives through gift or inheritance will constitute their nonmarital property and will not be equitably divided at divorce.
Under the equitable distribution system, courts divide marital assets in light of relevant circumstances. An equitable split of marital assets does not necessarily entail an equal fifty-fifty division. Instead, the courts will property division matters on a case-by-case basis, looking to the unique circumstances of each marriage.
New York Law Regarding the Division of Professional Licenses
In 1985, the New York Court of Appeals held that professional degrees and licenses were considered marital property subject to division upon divorce. However, the New York Legislature passed a law in 2015 that definitively categorized the value of a spouse’s enhanced earning capacity due to having a professional license or degree is not subject to equitable distribution upon divorce.
Division of Professional Practices as a Business Asset
New York courts have consistently held that professional practice can be deemed a marital asset subject to equitable distribution. If a party establishes a professional practice during divorce, the other spouse may have an equitable interest in such a practice as a business asset. Furthermore, the other party may have an equitable interest in the growth of a professional practice that preexisted the marriage to the extent that such growth can be attributed to marital funds assets or other contributions made during the marriage.
Comprehensive Legal Services from Goldweber Epstein LLP
If you need quality legal advice regarding your divorce, you should consult a dedicated attorney from Goldweber Epstein LLP with experience in family law. Our legal team has confidently and successfully handled a variety of family law matters for New York families, including equitable distribution issues in a divorce.For a consultation exploring your legal rights and interests, call us at (917) 809-7669 or visit us online today.