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Decades Of Litigation Experience

SEPARATE PROPERTY CREDIT

| Jun 23, 2021 | Firm News |

By Matt Cavallo, Esq.

If you contribute money that is separate property to the purchase of marital property then under New York law you may be entitled to receive a separate property credit during your divorce proceeding. See Falgoust v. Falgoust, 15 A.D. 3d 612, 614 (2d Dep’t 2005) (“Moreover, the plaintiff was entitled to a separate property credit for the value of the Carling Drive property even though he used the net proceeds from its sale as partial payment on a new marital residence with title taken in the names of both parties as tenants by the entirety . . . .”)

This property credit may be owed to you even if the separate property was used to purchase a home that is titled in both spouses’ names. See id.

Notably, however, while you may be entitled to this separate property credit, a court, in relation to the appreciation of the marital asset to which the contribution was made, may increase the amount of the other spouse’s share to account for appreciation in the value of the property during the marriage that was due to the efforts of said spouse. See id. (“[W]here such appreciation was due in part to the contributions and efforts of the nontitled spouse as a parent and homemaker, the amount of that appreciation should be added to the sum of marital property for equitable distribution”) (citations and internal quotations omitted). Accounting for such increases will offset the amount of your separate property contribution during the divorce.

Ultimately, a court has broad discretion to determine the equitable distribution of marital property. See generally Kaufman v. Kaufman, 189 A.D. 3d 31, 56 (2d Dep’t 2020). As a result, there is no guarantee that you will be entitled to a separate property credit for your contribution. However, if you can receive such a credit, it may be a great financial benefit that you receive during the divorce proceeding.