The division of property can be one of the most important issues in a divorce, which can make it difficult to resolve without the help of an unbiased third party. If you and your spouse want to avoid litigation costs, you can benefit from divorce mediation for property division. An experienced mediator can guide you through the stress of the property division process and provide you with reasonable resolutions through means of equitable distribution.

What Is Equitable Distribution?

Equitable distribution refers to the division of assets and debts acquired during the marriage. Essentially, the goal of equitable distribution is to divide marital property as fairly as possible. In mediation, couples can discuss and choose how best to allocate their assets and debts based on a variety of factors, including, but not limited to:

  • The duration of the marriage
  • The income and property of each spouse
  • The age, health, and earning capacity of each spouse
  • Whether or not spousal support was awarded
  • The wishes of both spouses regarding certain assets
  • The liquid and non-liquid nature of the property involved

Because each case is unique, these factors may vary from couple to couple. It is also important to note that dividing property “equitably” does not necessarily mean there will be a 50/50 split.

Types of Property

The distribution process is to distinguish if it’s marital or separate, place a value on the property, and distribute it between the spouses. During a marriage, a couple may acquire valuable assets, as well as debt. Property is often categorized into two groups: separate and marital.

Separate property is property that belongs to one spouse, such as property acquired before the marriage or inherited before or during the marriage. In the state of New York, separate property can include any assets that were:

  • Acquired by one spouse before the marriage
  • Received by one spouse as an inheritance or gift
  • Acquired as compensation for a personal injury unrelated to wage loss or earning capacity
  • Characterized as such in a prenuptial agreement

Marital property represents property acquired during the marriage, regardless of who holds the title. Marital property can include:

  • Physical property purchased prior to the marriage
  • Personal items or property such as vehicles, furniture, houses and/or other real estate, or collectable items
  • Gifts given for or by a spouse
  • Income and purchases made with that income
  • Retirement benefits

Liquid & Non-liquid Assets 

Assets are classified as either liquid or non-liquid.

Liquid assets can be easily and quickly converted to cash with little impact to the overall value. An asset that can readily be converted into cash is similar to cash itself because the asset can be sold with little impact on its value. There are a few factors considered when determining when an asset is liquid:

  1. It must be in an established market.
  2. It must have a large number of interested buyers.
  3. Ownership must be easily transferrable. 


Liquid assets are the most basic type of asset, used by consumers and businesses alike, because they are flexible, readily accessible, and relatively easy to obtain.

Here are some examples of liquid assets:

  • Cash in checking accounts, savings accounts, and money market accounts
  • Certificates of deposit (A CD may be liquid, depending on its terms and charges.)
  • Life insurance cash value (Cash value can be liquid, but if your policy has a surrender charge early on, it may not be considered a liquid asset for a certain number of years.)
  • Annuities (If your policy has a surrender charge early on, an annuity may not be considered a liquid asset for a certain number of years.


Non-liquid assets
, on the other hand, can be more difficult to convert into cash or cash value and may come with a significant loss in value. Here are some examples of non-liquid assets:

  • Investment real estate (Real estate may take time to sell and requires significant effort to convert into cash.)
  • Business interests (These may require finding a buyer with the skill, experience, and capital needed to keep the business running.)
  • Funds in annuity contracts that are still in their surrender charge period
  • Stocks, bonds, and mutual funds
  • Other non-liquid assets could also include tangible items such as personal real estate, jewelry and cars.


While liquid assets can be easily sold for cash and have a stable market price, non-liquid assets cannot be quickly sold for cash.

Valuation of Assets

Determining the value of marital property, also called asset valuation, is crucial for performing equitable distribution. Asset valuation is the process of assigning a value to a specific property, such as stocks, bonds, businesses, real estate, artwork, or jewelry. For some assets, the fair market value will be easy to determine, while others will be more difficult. You and your spouse may then consider consulting a valuation expert for assistance.

The value used will be the fair market value as of the date of separation (DOS). The parties can then divide it based on that value, or they can choose to sell the property and split the proceeds. For example, if the property was recently purchased, the purchase price may be used to determine the value. However, this may not be useful for intangible assets that have greatly appreciated in value.


What About Debt?

Dividing debt goes hand-in-hand with dividing property. Much like a marital home or pension, debt and loans that are gathered throughout the marriage can be considered a joint concern, also known as “marital debt.” If a debt is considered to be “marital” in nature, then it can be allocated between both parties.

According to New York law, this can mean that the divorcing couple will be able to choose between settling the responsibility for a debt before they file for divorce in mediation. Spouses can also have “separate” debt, which usually refers to obligations that arose before the marriage. Separate debt would continue to be the sole responsibility of the spouse who initially incurred them.

Settlement Agreements

If you and your spouse can’t agree on issues such as property rights, then you may want to enter into a marital settlement agreement with the help of a mediator. The marital settlement agreement will later be filed with the court and become part of your divorce judgment, also known as a divorce decree.

By agreeing on all the terms in advance, you and your spouse can avoid stressful court appearances and misunderstandings. A well-considered, negotiated, and carefully written marital settlement agreement can show the court that you and your spouse have considered all the issues related to your particular situation. This can lead to a faster, less expensive divorce and avoid a trial, which can be very time consuming and costly.

Marital settlement agreements are valid and enforceable contracts. Once a court issues a judgment of divorce that includes a marital settlement agreement, the matter is usually final, and the divorce may not be challenged.

How A Mediator Can Help 

Litigation or settlement negotiations can be very costly and time-consuming. With the guidance of an experienced divorce mediator, you can reach an agreement that is custom-made for your family, your finances, and your future.

Divorce mediation is the preferred choice for families facing divorce because it provides a cost-saving means to reach agreements in a cooperative setting. At the same time, divorce mediation gives couples more control over the process and decision-making. As a result, communication between couples is better so resolutions take less time.  If you should have any further questions regarding equitable distribution in Long Island or the greater New York area, please contact the New York Divorce Mediation Group at (516) 749-5017 to speak with one of our experienced divorce mediation attorneys.

SHARE IT:

Related Posts

Comments are closed.