Equitable distribution of property: NY versus CT

If residency requirements to file for divorce are met in both New York and Connecticut and you have a significant accumulation of property/assets, evaluating the best state in which to file for your divorce could highlight material differences in the potential or expected value of your property settlement based on your choice of jurisdiction.

It is always best practice to consult with an experienced divorce and family lawyer that practices actively in both New York and Connecticut to help you evaluate if there are compelling or strategic reasons to file in one state versus the other.  Needle | Cuda: Divorce and Family Law has extensive experience in this area.

Equitable Distribution:  “Marital Property” vs. “Separate Property”

Both New York and Connecticut courts divide marital property as part of a divorce case.  However, there are significant differences between the two states when determining what property is in the “marital pot.”

Connecticut is an “All Property” State

Connecticut is referred to as an “all property” state, meaning that all property owned by either party is generally considered marital property and subject to division in a divorce action.  Connecticut does not exclude as a matter of law, for example, property owned prior to the marriage or inherited property.  That beach house that has been in a party’s family for generations and titled only to that party?  It is a marital asset in a Connecticut divorce action.  The court will exercise its discretion to divide that property in a fair and equitable manner, but all property is “on the table” in a Connecticut divorce.

New York law excludes certain types of “Separate Property” from being considered “marital property” and from equitable division in a divorce

New York, on the other hand, excludes certain types of property from its definition of “marital property”, which can generally be defined as all property acquired during the marriage.  Under New York law, “separate property” includes the following:

• Property acquired before the marriage;
• Inheritances;
• Gifts to one party from a third party; and
• Compensation for personal injuries.

Separate Property is not subject to equitable distribution in a divorce action brought in New York.  The party who holds the separate property is typically entitled to retain it after the divorce without compensation to the other party.  There are, however, many nuances to the law on separate property in New York and the legal analysis of this issue is often not straightforward.

For example, a spouse may have a claim to a portion of the appreciation in the value of separate property that occurs during the marriage, such as in the case of a business.  Separate property can also be converted into marital property if it becomes commingled with marital property, i.e., separate property must be held separately, such as in a separate bank account, to retain treatment as separate property in divorce.

The effective dates for the valuation of “marital property” are different in a New York vs. Connecticut Divorce

Another significant difference between the law in New York and Connecticut relating to equitable distribution is the effective date on which marital property is to be divided.  In New York, no property acquired after the commencement date of your divorce is considered marital property.  For example, income earned during a divorce case is that party’s separate property.  Marital assets and liabilities are generally fixed at the commencement date in a New York divorce.  In contrast, in a Connecticut divorce, marital assets and liabilities continue to accrue all the way to the date on which the marriage is finally dissolved by a judgment of the court.

Consult an attorney or law firm with experienced in both New York and Connecticut Divorce

If you can make a case for dual residency in Connecticut and New York, it is critical to evaluate the differences in applicable law and how those differences might impact the property settlement component of your divorce.

Contact us at 203-557-9500 or through the firm’s website, www.needlecuda.com.