Marital Property

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In its October 22, 2024, decision in Szypula v. Szypula, the Court of Appeals held that if marital funds are used to purchase premarital pension service credits, those premarital credits are marital property. But …

Mr. Szypula joined the Navy nine years before the parties married. He left the Navy two years later. The Court noted that, in general, members of the armed services become entitled to retirement pay only after they complete 20 years of service. Therefore, when the husband left the Navy, he was not entitled to retirement benefits.

After working in the private sector for 14 years, the husband joined the Foreign Service (diplomatic service personnel under the Department of State). The husband enrolled in the Foreign Service Pension System.

Veterans who enter the foreign service may add their years of military service to their Foreign Service pensions by making additional contributions for the years they served in the military. The husband purchased his 11 years of Navy service by having $9,158.00 withheld from his Foreign Service pay over seven years through 2018.

In 2019, the wife filed for divorce. The parties could not settle whether the husband’s purchased premarital pension credits were separate or marital property. After the nonjury trial, Tompkins County Supreme Court Justice Joseph A. McBride held the credits to be marital property.

The pension rights at issue in this case were the product of both his pre-marriage service and the contribution of marital assets.

The Appellate Division, Third Department, reversed, finding that the premarital credits were separate property. However, the Third Department held the funds used to purchase those credits were marital property to be equitably distributed.Continue Reading Premarital Pension Credits Purchased with Marital Funds are Marital Property, But …

For 13 years, Mr. De Niro and Ms. Hightower failed to account annually for their commingled separate and marital property when making investments or acquiring assets as required by their 2004 Prenuptial Agreement (PNA). In effect, the decisions in their 2018 divorce action have now interpreted this annual accounting requirement as an agreement to forever arbitrate and not litigate the marital and separate property issues of the divorce.

In his March 15, 2023 decision in Anonymous v. Anonymous, Supreme Court New York County Justice Ariel D. Chesler directed the parties to immediately provide to the parties’ chosen accountant those 13 years of disclosures . The accountant, and not the Court, would make the separate/marital property determinations. In doing so Justice Chesler applied the 2021 Appellate Division affirmance of a 2021 Order of now-retired Justice Matthew F. Cooper.Continue Reading Lessons to be learned from the De Niro/Hightower divorce and prenuptial agreement

What happens on divorce when during the marriage, the marital residence that had been owned by one spouse prior to the marriage is conveyed during the marriage to the parties jointly? That was the issue addressed by the Appellate Division, Second Department, in its decision this month in Spencer-Forrest v. Forrest.

The parties were married on March 31, 1984. There were no children of the marriage, but children from each of the parties’ prior marriages resided with the parties in the marital residence during the children’s respective minorities. Both parties were employed for the majority of the marriage, and the wife provided care for the husband’s children, who were younger and resided in the marital residence longer than her children.

The husband had purchased the marital residence prior to the marriage, and transferred the property to himself and the wife as joint tenants in 1989. Other than the marital residence, the parties’ assets were held in their respective names. Both parties contributed to the household expenses, although the husband contributed a larger sum to household expenses and maintenance of the marital residence, and the wife ceased financial contributions in 2006 or 2007, after she retired.

In August, 2012, the wife commenced this action for a divorce and ancillary relief. The wife was 68 years old and the husband was 67 years old at the time of trial.

Except for the marital residence, Nassau County Supreme Court Justice Stacy D. Bennett divided the marital property) equally (other than the vehicles and personal items) regardless of the party holding title. As to the residence, Justice Bennett awarded the wife 20% of the appreciation in the value of the marital residence from 1989 (when the husband conveyed the home to the parties jointly) through the date of the commencement of the action, an award amounting to $30,000. The court declined to award the parties credits sought for assets allegedly secreted or wasted by the other party and denied the wife an award of maintenance.Continue Reading When One Spouse Transfers Sole Title to the Home to Both Spouses Jointly

1% sale high resolution renderingDivorce cases are supposed to have an ever-increasing set of rules. Last week’s decision of the Appellate Division, First Department, in Campbell v. Cambell demonstrates that while a judge must follow the rules, the judge still has many tools to accomplish an equitable result. Perhaps the most powerful is discretion.

In Campbell, the parties were married in 1973. After living together as husband and wife for only 52 months, the husband vacated the marital residence in 1978. The parties’ minor son remained with the wife. For the next 37 years, the parties lived separate and apart, the husband providing no economic or non-economic support to the wife and child.

In 2011, the wife retired from her job at Lincoln Hospital, where she began working in 1973, the same year as the marriage. She is now collecting $4,241.95 per month in pension benefits.

In 2013, the wife commenced this action for divorce. The wife’s pension was the parties’ primary marital asset. Supreme Court, Bronx County Justice Doris M. Gonzalez awarded the husband 50% of that portion of the wife’s pension that was accumulated during the 52 months the parties lived together. The husband appealed.Continue Reading Husband Who Left Wife and Child Awarded 1% of Wife’s Pension

The ever-changing landscape of Equitable Distribution case law makes it difficult, if not impossible, to rely on the “law.” A parent cannot (or rather, should not) make a gift to a married child without bringing the lawyers into it.

Take the April, 2016 decision of the Appellate Division, Second Department in Mistretta v. Mistretta. There, the parties had been married in 1991. During their marriage they lived in a home, at first owned by the husband’s mother, and deeded to the husband in 1996.

At the trial of this 2010 divorce action, the husband claimed that the residence was a gift from his mother, and therefore constituted separate property. However, he acknowledged that for many years, he paid his mother $500 per month “rent” (the opinion does not state whether rent was paid after the property was deeded to the husband). The husband and his sister both acknowledged that rental income from the subject premises was paid to the husband’s mother pursuant to the written agreement between the husband and his mother that was introduced into evidence.

Supreme Court, Suffolk County Justice Joseph Santorelli held that the home was marital property subject to equitable distribution. He directed the sale of the premises, with the parties to share equally in any net proceeds or deficiency from such sale.Continue Reading You Can't Make A Gift To Your Married Child Without Getting The Lawyers Involved

What do you do upon divorce when the home purchased during the marriage and titled in one spouse’s name was purchased using the proceeds from the sale of the home owned at the date of marriage solely in the name of that same spouse?

The Appellate Division, Second Department, in its March 2, 2016 decision in Ahearn v. Ahearn, applied well-established equitable distribution principles to affirm the determination of now-retired Suffolk County Supreme Court Justice William J. Kent, III, and hold that the home purchased during the marriage was marital property even though titled in only the one spouse’s name. Moreover, the titled spouse was entitled to a dollar-for-dollar separate property credit against the equity in the marital-property home for the use of the first home’s net sales proceeds.

The fact pattern was straightforward. In June 1996, the wife-to-be purchased a house on Salem Street in Patchogue. Approximately nine months later, the parties were married and lived together in the Salem Street house. In December 2004, the wife sold the Salem Street house and used the $143,000 in net proceeds from that sale toward the purchase, in March 2005, of a house in Holbrook. Only the wife’s name was on the Holbrook deed, but, at the time of trial, both parties were listed on the mortgage.Continue Reading Tracing One Spouse’s Pre-Marital Home Sold During Marriage To Purchase Another

Once again, it has been made clear that where either or both spouses have assets or liabilities at the date of marriage, it is foolhardy (or at least imprudent) to enter the marriage without a prenuptial agreement and/or the assembly of proof of the extent, nature and value of those assets or liabilities.

Take the January 8, 2015 decision of the Appellate Division, Third Depatrtment, in Ceravolo v. DeSantis. In that case, the parties were married in July, 1996. The wife commenced the action for divorce in June, 2010. Acting Albany Supreme Court Justice Kimberly O’Connor determined, among other things, that the marital residence, which had been purchased by the husband prior to the marriage, was marital property and awarded the wife, among other things, half of its value. The husband appealed.

The Third Department agreed with the husband that Justice O’Connor erred in classifying the marital residence as marital property. Marital property is defined as “all property acquired by either or both spouses during the marriage” (Domestic Relations Law §236[B][1][c]), while “property acquired before marriage” is separate property (D.R.L. §236[B][1][d][1]).

Title is a critical consideration in identifying the nature of real property acquired before the marriage. The circumstances surrounding the purchase of the residence and the parties’ intent relative thereto are irrelevant to the legal classification of the residence as separate or marital property.

Here, the husband purchased the marital residence in January 1994 — 2½ years prior to the parties’ marriage — paying $130,000 of his own funds and borrowing an additional $100,000 from his father, secured by a note and mortgage. Although the wife contributed $30,000 of her separate funds to the initial purchase of the residence, the husband took title to the property in his name alone.Continue Reading Title Controls Premarital Contributions To The Acquisition and Expenses of Property

In its October 22, 2014 decision, the Appellate Division Second Department in Ebel v. Ebel  upheld an open-court divorce settlement stipulation against the attack of the wife.

In his June, 2012 determination of the lower court, then Supreme Court Suffolk County Justice Hector D. LaSalle (now himself an Associate Justice on the Appellate Division Second Department) had rejected the argument of the wife that her emotional state prevented her from entering that May, 2011 settlement stipulation knowingly, voluntarily and intelligently.

On appeal, the Second Department first noted that the wife’s contention that the terms of the parties’ stipulation of settlement were unconscionable was not properly raised on appeal, as it was not raised at the trial level.

The wife’s additional contention on appeal that the stipulation should have been vacated because it did not address, and she did not waive her claims regarding, certain financial issues was also found to be without without merit.

The Second Department noted that stipulations of settlement are favored by the courts and are not lightly cast aside, particularly when the parties are represented by attorneys.

Where, as here, the record demonstrates that the parties validly entered into a comprehensive open-court stipulation by which the plaintiff knowingly, voluntarily, and intelligently agreed to be bound, the agreement will not be set aside.

Here, the terms of the parties’ agreement, including issues of financial support and equitable distribution of the marital residence, were placed on the record in what the Justice LaSalle characterized as a “global stipulation of settlement.” Moreover, the wife’s counsel affirmatively waived all other equitable distribution matters and withdrew all outstanding requests for relief.Continue Reading Attacking Open-Court Divorce Stipulations: Is There a Double Standard?

It depended on what the definition of “the” was.

In Babbio v. Babbio, the Appellate Division, First Department, on July 17, 2014 defined “the” and otherwise interpreted a prenuptial agreement in ways that cost a husband millions of dollars of separate property credits he sought in his divorce action.

Under the parties’ agreement, marital property, generally, was to be divided equally. However, the agreement also provided:

[i]n the event of an Operative Event, Marital Property [as defined elsewhere in the agreement] shall be distributed equally between [the parties] in accordance with the following provisions, except that if the parties have been married for ten (10) years or less and either party is able to identify One Million ($1,000,000) Dollars or more of Separate Property that was used for the acquisition of the Marital Property, that party shall first receive the amount of his or her contribution of Separate Property prior to the division of the remaining value of such property, if any. [emphasis added]

“Operative Event” was defined, inter alia, as “the delivery by [either party] to the other of written notification … of an intention to terminate the marriage.” Here, the Court held that it was the date of the notification, and not the date of distribution that was determinative. As a result, the husband became entitled to the benefits of this provision.

However, construing the parties’ prenuptial agreement in what the Court viewed as being in accord with the plain meaning of its terms, and interpreting every part of the agreement “with reference to the whole”, the First Department found that the party seeking the credit must have contributed $1 million or more of his or her own separate property directly to the acquisition of the particular item of marital property at issue.Continue Reading Husband Denied Millions in Separate Property Credits Because of the Definition of "The"