New York is an equitable distribution state, which means that the court will divide a couple’s marital property in a manner that it deems fair during a divorce. In most cases, the exact split is determined by each person’s income, net worth and age at the time of the divorce. If you own real estate, there are steps that you might be able to take to protect it from being seized by your spouse in a final settlement.
Include real property in a prenuptial agreement
A prenuptial agreement can be used to specify who retains the rights to a given piece of property if the marriage comes to an end. Therefore, you may want to create such a document to clarify that you will retain control of any rental homes, commercial buildings or other real estate that you currently own.
Real property can be placed into a trust
Assets that are placed into a trust are generally considered to be outside of the marital estate. Therefore, they are generally unable to be included in a divorce settlement. Ideally, you’ll place your real estate holdings in a trust before divorce proceedings begin. Otherwise, there is a risk that it could be invalidated by a judge, which may make these assets vulnerable to being split in a divorce decree.
You could offer your spouse a portion of the income these assets generate
Your spouse may agree to let you keep a home, building or parcel of land in exchange for a portion of any revenue it generates. You could also agree to pay your spouse a flat fee to buy that person’s ownership interest in one of those items. Finally, you could offer to waive your right to other marital assets in exchange for retaining full ownership of a residential or commercial property.
A divorce will likely have a profound impact on your life even if you are able to retain important assets. In some cases, you may be required to pay alimony to your former partner, which may limit your ability to save for the future.