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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 …

Drafting divorce settlement agreement provisions to dispose of the marital home is not easy. Anticipating how things will play out can be very difficult.

In some cases, one spouse may be remaining in the home with the children for a stated period of time, or until a stated event (such as the children’s graduation). How are bills to be paid in the interim? Will either spouse be entitled to credits?

What will be the procedures when the time/event happens? At the end of that period of “exclusive occupancy” (or perhaps immediately), the parties will be selling the home. Alternatively, one party may want to buy out the other. If the home is to be sold to a stranger, how is the broker to be selected, if there is to be one? How is the initial listing price determined? Must a certain bid be accepted? What happens if there are no bids?

If one spouse wants to buy out the other, how is the other’s interest to be valued? Should the amount of a broker’s commission be factored in? May one spouse have a “right of first refusal,” the right to match a bid from a third party? How will that work?

Take the April 28, 2022 decision of the Appellate Division, Third Department, in Martin v. Martin. There, the parties’ 2012 divorce settlement agreement granted the husband the right to buy out the wife’s interest. The agreement provided that if the husband elected that option, the parties would obtain three appraisals, The husband would pay the wife half the “mean” (average) of those three appraised values minus a commission.Continue Reading Agreements to Dispose of Marital Home Interests