How Does Legal Separation Affect Property Division in New York?

Couples in New York can choose to legally separate rather than divorce. While a legal separation may provide certain benefits, such as the opportunity to live apart while remaining married, it can also create complex legal implications, particularly regarding property division. If you are considering legal separation in New York, consulting with a New York City legal separation attorney from the Law Office of Vivien I. Stark, P.C., to help you understand how the court handles property is crucial, as it can significantly impact your future financial security.

What Is Legal Separation?

A legal separation in New York is a formal process that allows married couples to live apart without ending their marriage. Unlike divorce, a legal separation does not dissolve the marriage, and the couple remains legally married. However, the couple may agree to various terms, including financial support, child custody, and property division, much like they would in a divorce. A legal separation could be temporary or may last for years. In New York, a party can file a lawsuit for legal separation or sign a separation agreement.  In most instances, signing a separation agreement is preferred and less expensive than an action for separation filed in the court.

Property Division in Legal Separation

One of the main concerns for couples considering legal separation is how to divide their property. Property division in a New York legal separation is largely governed by the same principles that apply in divorce proceedings. The state follows an equitable distribution model, meaning the court divides property fairly but not necessarily equally. It will consider various factors when determining how to divide assets, including the duration of the marriage, the financial situation of each spouse, and any agreements made during the separation.

A legal separation can be useful if a couple needs time apart before making a permanent decision or if they are not yet ready to divorce, but it is imperative to consider potential long-term consequences. Since a legal separation is not a divorce, a lawsuit for divorce would have to be commenced to obtain a divorce. It is for that reason that separation lawsuits are rare since parties rarely want two separate lawsuits to obtain a divorce. Instead, most parties choose to negotiate a separation agreement.  This is done when parties do not seek an immediate divorce or want to make sure that all terms are worked out prior to commencing an action for divorce.

Assuming that the separation agreement is drafted properly, the terms of the separation agreement are usually incorporated by reference and not merged in any divorce decree. This significantly increases your chances of obtaining an uncontested divorce since most times, the issues are resolved in the separation agreement.  If you and your spouse do not reach an agreement on property division during the legal separation process, the court may still need to step in, which can lead to a lengthy and expensive process.

Marital Property vs. Separate Property

Before understanding how the court divides property, it is essential to differentiate between marital property and separate property:

• Marital property: This is property acquired during the marriage, regardless of whose name is on the title or who paid for it. Marital property includes income, real estate, vehicles, retirement accounts, and other assets obtained during the marriage. In a legal separation, marital property is subject to division.
• Separate property: This refers to property that one spouse owned before the marriage or received as a third-party gift or inheritance during the marriage. Gifts between spouses are marital property. Separate property is not subject to division in a legal separation or divorce unless the separate property has been commingled with marital assets. Appreciation of separate property may in some cases be considered marital property.

Equitable Distribution in Legal Separation

Even though legal separation does not end the marriage, the court may still divide marital property in an equitable manner, much like a divorce proceeding. The court will look at factors such as the length of the marriage, the financial needs and contributions of each spouse, the future financial needs of each spouse, and any prenuptial or postnuptial agreements.

While legal separation provides couples with an option to live apart without ending their marriage, it can have significant implications for property division. It is crucial for couples to understand how New York’s laws regarding equitable distribution and property classification may affect their assets and future financial situation. Whether as a party to a lawsuit or separation agreement, before signing, each party should consult with counsel and if possible, retain counsel so that your rights are protected. Failure to obtain counsel does not invalidate the agreement. Instead, you most likely will have to live with what you now realize is an unfair agreement for a long time or spend significantly more money in an attempt to have the whole or parts of the separation agreement deemed unenforceable by the court.