Which May Be Most Equitable: A Court or Mediation Settlement? – Part 1

Which May Be Most Equitable: A Court or Mediation Settlement? - Part 1 by Sandy Balick

{3:24 minutes to read} In divorce, the fair and orderly division of the property owned by a couple unfolds under the banner of “equitable distribution.”

You are reading the first of several posts on equitable distribution. In coming installments, I’ll touch on a number of basic concepts on this subject and will contrast the court and mediation-based approaches to the manner in which assets and debts get divided upon termination of a marriage.

The statutory and judicial rules that shape the equitable distribution process are relatively straightforward. But there’s plenty of room for complexity (and a couple doesn’t have to have millions in assets for this to be the case). Thus, where spouses cannot voluntarily settle property issues, the process, if played out in the courts, has the ability to become stunningly expensive, not infrequently diminishing the value of the marital estate, even while helping to distribute it.

Marital mediation offers a powerful and vastly more economical route to distribution. But just like the court-based approach, the process must emerge from an open and honest identification and disclosure of the assets (and debts) that make up the marital estate.

The Marital Estate

It’s helpful to start consideration of this topic with a brief look at just what constitutes the “marital estate.” In a way, there are three entities in marriage—the two spouses plus the fictitious entity recognized by the law as the marital estate. The marital estate is the manifestation of the economic partnership described by the law.

In a formal business partnership, a detailed agreement dictates many things, including how the business is to be liquidated. Where the marital economic partnership is concerned, unless there is a prenuptial agreement covering the subject, New York’s statutes and judicial decisions supply the necessary details as to the distribution of the marital estate between the spouses.

Those who’ve not had occasion to encounter New York’s equitable distribution law frequently assume that assets and liabilities are simply divided down the middle, and that’s the end of it. This may be the result in many cases, but, in a phrase repeated in judicial opinions with mantra-like frequency, the courts are quick to point out that equitable does not necessarily mean equal when it comes to asset distribution.

Where couples choose to mediate their separations and divorces, they are given wide berth by the law to establish their own rules of equitable distribution, a freedom guaranteed by statute (New York Domestic Relations Law (DRL) Part B, 3.).

Before determining the marital estate and considering how to divide it, it is first necessary to distinguish marital from non-marital assets—the starting point for my next installment.

Sanford (Sandy) Balick, Attorney & Mediator, NY Sandy Balick signature
Sanford E. Balick, Esq.
Founder & Principal Mediator
Consensus Point Mediation, LLC.

Phone: (646) 340-3434
Email: ConsensusPointLLC@gmail.com
www.ConsensusPointMediation.com
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