Separate Property and Maintenance on Long Island

On June 13, 2013, the appellate court decided the case of Owens v. Owens.  At issue in this case was the maintenance awarded to the wife.  The parties were married in 1985 and had two children.  Before the parties were married, the husband owned, through an inheritance, an apartment building in New York City.  He sold this property during the marriage netting six million dollars.  He promptly placed that money in separate account however the parties were living off the proceeds.  Further, the husband owned the marital residence which the parties shared throughout the marriage.  The couple divorced and the wife argued that the husband had wasted his inheritance and the separate property he owned.  As a result, the wife wanted the Court to take into consideration this wasteful dissipation of assets when awarding maintenance.

When dealing with property in a marriage, the first step the Court will take is to classify all property.  Domestic Relations Law defines separate property as that acquired before the marriage or by bequest, devise or descent or gift from a party other than a spouse. Separate property also includes the increase in value of the separate property, except to the extent that such appreciation is due in part to the contributions or efforts of the other spouse.

The crux of the wife’s argument wasn’t that she was directly entitled to the separate property, she argued that the Court should consider the husband’s willful dissipation of his assets when determining what if any maintenance she is entitled.  The Court agreed.  The Court held that evidence of egregious economic fault in mismanaging, dissipating and wasting separate assets can and should be considered under the statutory catchall “just and proper” factor for equitable distribution and maintenance.  In addition the Court will take into consideration separate property as part of a spouse’s income, property, present and future earning capacity and ability of each party to become self-supporting.  Thus, the Court, in determining a maintenance award—with an eye to her ability to be self-supporting—must take into account her pre-divorce standard of living, which in this case, was provided mainly by the separate property income of the husband.

Separate property on its face may be a simple determination, however as this case illustrates, classification of property is only the first step.  How that property was used and the effect on the marriage can and will be used as a factor when the Court is contemplating a maintenance award.

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