WHAT TYPES OF ASSETS MAY BE DISTRIBUTED IN NEW YORK STATE?
Under the New York Domestic Relations Law, all assets acquired by either party during the marriage may be divided between the parties in equitable distribution. This means that any interest you may have in any asset may be appraised and/or valued in order to ascertain the value of your interest in the asset.
Some examples of assets which may be distributed upon divorce include real property, vehicles, boats, bank accounts, securities, stocks and options, brokerage accounts, accounts receivable, life insurance cash value, pensions, retirement accounts, trust accounts, household furnishings, jewelry, art, antiques, business interests, and professional degrees and licenses.
For those assets that do not have a fixed or readily ascertainable value, it may be necessary to have an appraisal or valuation performed to determine the value of the asset.
Two of the most common valuations performed in matrimonial actions are valuations of businesses and valuations of professional degrees and licenses. Choosing a reputable professional to value your business or degree is extremely important. It is important in choosing the evaluator to consider the evaluator’s experience in performing valuations of this type, their educational background, and their reputation in your locality. All of these factors will have an impact on the valuation and how the results of the valuation are perceived by opposing counsel and by the Court. Westchester Matrimonial attorneys are familiar with professionals who can assist you with valuation of your business or degree. We have a broad network of resources to help you find an evaluator who is a good fit for your case.
BUSINESS VALUATIONS AND DISTRIBUTION OF BUSINESS INTERESTS
If you or your spouse owns a business, it is important to obtain a valuation of the business to determine not only the value of the business as of the date the divorce began, but to determine the increase in the value of the business over the course of your marriage. The appreciation in the value of the business, if any, may be subject to equitable distribution. In valuing the business, the evaluator will examine the books and records of the business, will speak with you in depth about the business, and will compare your business to others of its type in order to ascertain the value of the business and the appreciation in value of the business. In some cases, both spouses will retain an evaluator to evaluate the same business; if your spouse’s evaluator’s report seems inaccurate, you may choose to have a second valuation performed.
Once the value of the business has been determined, the value must be equitably distributed between the spouses. In distributing the value of the business, contributions of each spouse to the value of the business are considered. The appreciation in a business (or any other asset, for that matter) may be due to active contributions or passive contributions of either spouse. Depending on the ways in which each spouse has contributed to the business, each spouse’s entitlement to receive a share of the business can be determined. All contributions to a business will be considered. For example, a spouse who worked in the business alongside his or her spouse may be determined to have made contributions to that business, thereby increasing its value. A spouse who stayed home to care for children while the other spouse worked out of the home at the family’s business may be determined to have made contributions to that business, thereby increasing its value. The nature and extent of contributions are important in equitably distributing a business. The more direct contributions a spouse has made to the appreciation of the value of the business, the greater percentage of that business the spouse should receive.
Oftentimes, the spouse who manages the business will retain the business and continue to manage the business while the other spouse may receive a cash distribution representing his or her share of the business. In some cases, a business may be sold and the proceeds of sale distributed between the spouses. A Westchester Matrimonial attorney in connection with our experienced evaluators can help you to determine which option is best for your business.
VALUATION AND DISTRIBUTION OF PROFESSIONAL LICENSES AND DEGREES
A professional license or degree obtained during the marriage has been declared by the NY Court of Appeals in the case of O’Brien v. O’Brien to be marital property subject to equitable distribution. A non-licensed spouse, therefore, may be entitled to a distributive share of the increased lifetime earning potential of the spouse holding the license or degree. This may be the case even if the licensed spouse does not use his or her degree, according to some New York Courts. New York is currently the only State that treats enhanced earning capacity in this manner.
A professional degree or license may be valued just as is the case for a business. An experienced evaluator can assist you in determining the value of your degree, or, alternatively, the value of your spouse’s degree. The evaluator will determine the licensed spouse’s lifetime working expectancy, expected earnings, and compare the expected earnings to a person without a degree. The difference between the expected earnings of a person without a degree and the licensed spouse’s expected earnings is reduced to present dollar value. The present dollar value of the holding spouse’s enhanced earning capacity is subject to equitable distribution. As is the case in distribution of a business, each spouse’s contributions to the licensed spouse’s acquisition of the license or degree are considered. The more direct contributions a spouse has made, the greater percentage of the increased earning capacity the spouse should receive.
Any property or assets acquired by you or your spouse during the marriage may be subject to equitable distribution. In order to appropriately distribute the property amongst you, a valuation or appraisal may be necessary.
Contact Westchester Matrimonial today to speak with one of our experienced attorneys about valuing and distributing your property.