In a New York matrimonial action the equitable distribution of property requires a four step analysis.  This post will examine the first two of these steps in order.  The final two steps will be discussed in two additional posts.

The first task in an equitable distribution analysis is the identification of assets and liabilities.  Each asset and liability must be specifically identified.  Documentation is the best way to do this.  This sometimes is an area of great controversy since parties sometimes try to hide assets.  Other times, parties lose track of assets or debts.

The next task is to classify the parties’ assets and liabilities as either marital or separate property.  The Domestic Relations Law defines marital property as “all property acquired by either or both spouses during the marriage and before the execution of a separation agreement or the commencement of a matrimonial action.”

The Domestic Relations Law creates a statutory presumption that “all property, unless clearly separate, is deemed marital property”.  The burden rests with the titled spouse to rebut that presumption.  The Court of Appeals has stressed repeatedly that marital property should be “construed broadly in order to give effect to the ‘economic partnership’ concept of the marriage relationship.”  By contrast, separate property should be construed “narrowly.”

In order to overcome the presumption that assets are marital property, there must be documentary evidence to trace the assets in question to premarital separate property.  When the assets in question were acquired during the marriage, a party’s testimony that the source of the assets was premarital property, without supporting documentary evidence, is insufficient to overcome the marital presumption.  Where a party fails to trace the sources of money or assets claimed to be separate property, a court must treat such as marital property.

This part of the analysis also is ripe for disputes when separate property is mixed with marital property or parties dispute the sources of assets.