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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Litigating a Matrimonial Case

When seeking a divorce, you should always attempt, in good faith, to settle your matter if possible.  By entering into a separation agreement, you are able to control some if not all of the terms.  If settling is not possible, then you are leaving your fate to the Court.  Lets look at the recent case of Musacchio v. Musacchio, which the appellate division recently decided on June 27, 2013.

Here the parties were unable to settle and went to trial.  They were married in 1990 with three children.  If you are a follower of my blog posts, you know by now,  in a custody battle normally, a law guardian is appointed to represent the best interests of the children.  While appointing a law guardian is strongly encouraged such an appointment is discretionary and not mandatory.   In this case, the Court decided not to appoint a law guardian.  Without a law guardian the court must decide custody without the benefit of an attorney representing the children.  The wife in this case was awarded physical custody of the children. The Court relied on all relevant factors including the parents’ ability to provide a stable home environment for the children, the children’s wishes—though without a law guardian one can only surmise what their wishes are after perhaps through questioning by Court and having them put in the uncomfortable position of choosing—the parents’ past performance, relative fitness, ability to guide and provide for the children’s overall well-being, and the willingness of each parent to foster a relationship with the other parent.   In this case, the wife was a stay at home mother and the husband worked long hours in the financial industry with frequent travel.

When it came to distributing the property, the Courts fashioned a distribution which was not necessarily 50/50.  When you leave it to the Court to distribute assets remember that there is no requirement that the distribution of each item of marital property be on a equal or 50/50 basis.  A trial court has substantial discretion to fashion awards based on the circumstances of each case and the determination will not be disturbed absent an abuse of discretion or failure to consider the requisite statutory factors.  In this case, the Court considered the  needs and circumstances of the parties.  Here the husband made over $200,000.00 a year while the wife barely made $10,000.00.  While the Court did not list the equitable distribution award, I am hard pressed to think, after the rationale given by the Court, that the husband and wife split all the assets 50/50.

Finally, the Court awarded maintenance to the wife for seven and half years.  The Court considered the parties’ financial circumstances, their respective ages, the length of their marriage and the wife’s loss of income while she was a stay at home mother, and the wife’s ability to increase her earning potential taking into account her age and prolonged absence from the work force.  In other words, maintenance was left up to the Court.  Unlike the temporary maintenance formula, there is lacks a guide that one can look to even attempt to figure out what, if any maintenance will be awarded and for how long.

As you can see, if you and your spouse cannot come to a settlement, the Court will decide.  Once the Court decides, if the decision is supported by the evidence presented at trial and well-reasoned, it is unlikely that the awards will be disturbed.

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