Premarital

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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 …

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