Should Weddings Come With a Warning Label? – Part II
In my last post I lamented that many people faced with a divorce would have benefited from a bit of education on divorce laws even before they got married. In this post I continue down the aisle…. more things people should know before they utter “I Thee wed.”
In October 2010, New York became a “no fault” state, joining the ranks of the other 49 states of the Union.
In large part this legislation was strongly supported by the many judges in the State who hear divorce cases. No fault divorce legislation was symbolic of the philosophy shared by divorce judges nationwide. Judges did not want to hear about the reasons a couple is divorcing. Whether the cause is serial infidelity, a drinking or drug problem, or because he/she leaves the toilet seat up or the toothpaste cap off, they do not want to hear about it. Judges want to focus on dividing marital assets and liabilities, fixing support and making sure the children are provided for. If a spouse was unfaithful, a slob, financially irresponsible or as cheap as Jack Benny, the Court’s remedy is: get a divorce. If you put up with it for years, the Court’s response: “Why didn’t you come to see me sooner?” In short, don’t expect the Court to compensate a spouse more because they have been the victim of a less than stellar bride or groom. They won’t.
New York’s definition of a marital asset is very broad and includes things that might not occur to you.
How uncommon is this: Couple gets married. One spouse works one, two, three or four jobs to support the family while the other spouse goes to school to get a degree, a license or some other special training so he or she can have a career and presumably make a better living. New York calls a degree, license or special training earned during a marriage “enhanced earnings capacity”. If time goes by and a divorce comes along, what happens to that degree, license or special training? In 49 states, the answer is: nothing. In New York, the court’s view this enhanced earning capacity as a marital asset, which can be valued (usually using an expert) and then divided as part of equitable distribution. For example, if a wife works so her husband can go to medical school and become a doctor and the parties later divorce, the value of the husband’s medical license and medical degree are considered marital assets and are subject to equitable distribution. This is true even if the husband has just graduated, with only school loans to show for his years of training. Enhanced earning capacity has been applied to law and medical degrees/licenses, securities brokers licenses, real estate sales licenses and even to an opera singer whose career took off during the marriage.
Wedding gifts are marital property if the gift is to both the bride and the groom.
The rule in New York is that gifts from third parties to a single spouse are separate property (gifts between spouses, however, are marital property). However, New York has a strong presumption that property received during a marriage is marital property and a party claiming separate property has the burden of proving it. So…. Wedding gifts (or even gifts received during the marriage) are presumed to be marital property, unless the party claiming the property is separate property can prove it. I guess that means you have to save the card! More about gifts next time.
To be continued…. Join me next time for more on the nuances of nuptials in New York.