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What happens to debts and assets in a New York divorce?

Most New Yorkers are two-career couples, and after being married for a few years or decades, it's quite easy to acquire significant assets. Below is some information one might need while transitioning through a high net worth divorce.

-- What happens to our debts and assets?

If you can't decide between you, a judge will divide both assets and debts equitably between you and your spouse.

-- Can I keep the house?

It's understandable to want to retain the property where you spent some of your best years and perhaps where any children were raised, but it might not be practical. Your two incomes may have been necessary to afford your marital digs, and both of you may have to downsize now.

-- What about the house in the Hamptons?

Vacation property is up on the chopping block too, and unless some quid pro quo arrangement can be hashed out between the two of you such as he gets the Warhol and the Mercedes and you take the Hamptons haven, the better option may be to put it on the market.

-- Who pays off the debts?

With New York being an equitable distribution state as opposed to a community property state, the balance of student loans is not generally a shared debt unless the spouse was a co-signer on the loan. That's a game-changer, but if you contributed toward repayment of any of the loans, you could receive credit for that against shared debt from credit cards or any open accounts.

-- My retirement plan has much more cushion than his; do I have to share?

Couples with significant retirement portfolios with complicated assets can benefit from obtaining a Qualified Domestic Relations Order, which essentially divides retirement plans between the divorcing spouses and can give much-needed tax relief.

As always, both parties should retain the counsel of a New York family law attorney prior to entering into any legally binding community property agreements or signing any documents related to the divorce.

Source: The Motley Fool, "Surviving Divorce" Aug. 26, 2014

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