Appeals Court Discusses Property Characterization in New York Divorce

Some people believe that the wife gets half of everything that the husband earns. This belief lacks nuance and fails to understand how the law works. Generally speaking, any property income, or asset you acquired during the marriage is property of the marital estate. When a divorce occurs, the marital estate is divested and split between the two parties in a manner that is equitable to both parties. This does not necessarily mean that the split will be even. The split could favor the lower-earning spouse. Further, not all property acquired during the marriage is considered marital property. Inheritances, for instance, are considered the sole property of one spouse.

While an inheritance can be converted into marital property, a spouse who is arguing that inheritance is marital property must support their position using convincing evidence. Otherwise, their argument will likely be rejected. This was the case in a recent divorce proceeding, Monroe v. Monroe.

Background of the case 

Husband and wife were married in 2013. During the marriage, the wife received a $125,000 inheritance from her grandfather. She used this toward the purchase of a $160,000 marital residence. In this case, the wife provided the husband with a “gift letter” stating that the $125,000 was an outright gift to him so that he could prove to the bank he had sufficient funds to purchase the house.

The husband filed papers to divorce his wife in 2021. The trial court determined that the $125,000 inheritance was separate property belonging to the wife. The husband appealed this judgment challenging the court’s classification of the inheritance as the separate property of the wife, making him responsible for the mortgage, and awarding spousal maintenance (alimony) to the wife.

Is the inheritance separate or marital property? 

The appeals court upheld the trial court’s ruling but modified the judgment by vacating the part that addressed the parties’ obligations related to the mortgage on the marital home. In its decision, the court noted that the husband had not preserved his contention that the $125,000 inheritance should be treated as marital property since he had conceded this point at trial. For that reason, the court upheld the decision of the lower court and determined that the wife was entitled to a separate credit for her inheritance.

In terms of the mortgage, the husband had argued that his responsibility to pay the mortgage was akin to an award of maintenance. The court rejected this argument and clarified that maintenance involves periodic payments for a spouse’s support, whereas the mortgage issue was a division of marital debt.

Talk to a Rockland and Westchester County Family Lawyer Today 

The Westchester County family lawyers at the Law Offices of Robert S. Sunshine represent the interests of New York residents who are going through a divorce. Call our office today to schedule an appointment and we can begin discussing your next steps right away.

Source:

law.justia.com/cases/new-york/appellate-division-fourth-department/2024/172-ca-23-01003.html