The Hartog v. Hartog Precedent (85 N.Y.2d 36)
In New York, separate property does not lose its character merely because it increases in value during marriage. However, the legal nature of that appreciation hinges on whether the growth was Active or Passive.
Passive Appreciation: Pure Separate Property
If an asset increases in value purely due to market forces, inflation, economic expansion, or third-party management (e.g. an inherited index fund or undeveloped raw land), the appreciation is 100% separate property.
Active Appreciation: Transmuted to Marital Property
Under Hartog, if the titled spouse participated in managing or enhancing the asset, OR if the non-titled spouse contributed directly or indirectly (by managing the home or caring for children, freeing the other spouse to focus on the enterprise), the appreciation is deemed marital property subject to equitable division.