Family Law in a Nutshell by John Myers & John E B Myers

Author:John Myers & John E B Myers
Language: eng
Format: epub
ISBN: 9781683282549
Publisher: West Academic
Published: 2016-05-25T16:00:00+00:00

§ 10–3 CHARACTERIZATION OF PROPERTY

One of the fundamental tasks in divorce cases is characterizing property as marital/community or separate/non-marital. As the Illinois Appellate Court put it in In re Marriage of Faber, 58 N.E.3d 52 (Ill. Ct. App. 2016), “Before a court may distribute property upon the dissolution of a marriage, it must first classify the property as either marital or nonmarital.” (See also, Lewis v. Pagel, 172 So. 3d 162, 172 (Miss. 2015)). Elaborate rules govern characterization, and the law varies somewhat from state to state. This section describes essential principles of characterization.

The most fundamental principle of characterization is that property—real or personal—that is acquired during marriage through the effort, energy, or skill of a married person belongs to both spouses, and is marital/community property. (Schwarz v. Schwarz, 192 Wash. App. 180, 368 P.3d 173 (2016)).

Property acquired prior to marriage is separate/non-marital property. (See 750 Fla. Stat. § 61.075(6)(b)(1); ILCS 5/503(a)(6); Dabo v. Sibblies, 36 N.Y.S.3d 648, 142 A.D.3d 459 (2016)). In Sellers v. Sellers, 294 Neb. 346, 882 N.W.2d 705 (2016), for example, husband owned a cattle herd before marriage. The herd remained his separate property when the couple divorced a few years later. Property acquired during marriage by gift, decent, inheritance, devise, or bequest is separate/non-marital property. Marriage of Asta, 56 N.E.3d 1088 226

(Ill. Ct. App. 2016). Once a marriage ends, property acquired thereafter is separate/non-marital property. (See § 10–6, for discussion of when marriage ends for purposes of characterizing property). The Washington Court of Appeals wrote, “An asset is separate property if acquired before marriage; acquired during marriage by gift or inheritance; acquired during marriage with the traceable proceeds of separate property; or, in the case of earnings or accumulations, acquired during permanent separation.” (Schwarz v. Schwarz, 192 Wash. App. 180, 368 P.3d 173 (2016)).

Income from a trust may be separate/non-marital property or marital/community property, depending on the circumstances. In Pfannenstiehl v. Pfannenstiehl, 55 N.E.3d 933 (Mass. 2016), the Massachusetts Supreme Judicial Court considered a discretionary support trust with a spendthrift provision, established by husband’s father. Because the husband had no right to insist on income from the trust, the court ruled that the trust was a mere expectancy, and not property to be “included in the parties’ divisible marital estate.” For information on discretionary support trusts and spendthrift provisions, see § 9–11.

Many states utilize presumptions to characterize property. In California, for example, property acquired during marriage is presumed to be community property (Cal. Family Code § 760). Property acquired prior to marriage is presumed to be separate property (Cal. Family Code § 770). In New York, placing separate property money into a 227

joint bank account raises a presumption the money is marital property. (Valitutto v. Valitutto, 137 A.D.3d 1526, 28 N.Y.S.3d 472 (2016)).

When property has a formal title, the title sometimes helps to characterize the property. In California divorce cases, for example, taking title in one spouse’s name alone, during marriage, does not help characterize property. By contrast, taking title as joint tenants with right of survivorship raises a presumption the property is community property.

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