Agreements between spouses to distribute separate property in the event of a divorce can be extremely helpful in creating a fair and equitable result. However, even when there is an agreement, the court may override it as inequitable or unfair. Having an experienced family law attorney by your side can help considerably with these issues.
New York law defines “marital property” as any property that was acquired by either spouse during the marriage, but before the execution of a separation agreement, regardless of who holds title. This definition is deliberately broad to allow the court to distribute property in a way that it feels is the fairest result based on the unique circumstances of each marital relationship.
The law recognizes marriage as both an emotional and economic partnership, where both parties contribute. Courts have considerable discretion in determining which property is considered marital property.
A Case Example: Fields v. Fields
In Fields v. Fields, a husband and wife considered purchasing a townhouse in Manhattan. The wife wanted certain preconditions met before the purchase as she was concerned that caring for their son, working outside the home, and maintaining the townhouse would be too burdensome for her. Because of his wife’s reluctance, the husband decided to purchase the townhouse with his mother’s help. The man made a $30,000 down payment with funds he received from his grandparents, a portion of which was a loan. He paid $130,000 in total for the townhouse.
The husband and his mother managed the townhouse together, holding joint title. They deposited rent proceeds into a joint bank account and made mortgage payments from that account. However, the husband did indicate that he co-mingled marital funds within that account. Nonetheless, this co-mingling was the wife’s only interaction with the funds from the townhouse. She also lived in the townhouse for some time, but often lived in a separate apartment.
This couple eventually decided to get divorced. In divorce proceedings, the court determined that the value of the townhouse, excluding the $30,000 down payment, was marital property. This is despite the fact that the wife had only limited involvement with the townhouse and was explicitly not involved in its purchase. The court’s conclusion was upheld on appeal. The court specifically pointed out that any property obtained during the marriage is presumed to be marital property and must meet an exception to be considered separate property.
In this case the property was clearly separate, as the down payment came from third parties to the husband, his mother and an uncle. The mortgage and maintenance funds came from the rent, so the property was paying for itself. Furthermore, the wife was never placed on the title. The court simply gave the wife part of the house out of sympathy; there was no legal basis for the award in this case. The court reasoned that one of the apartments was the martial residence, instead of treating it as any other rental property. They awarded this to the husband and, out of pity, the wife received a percentage of the value.
While an explicit agreement between the wife and husband regarding the townhouse may have changed the outcome of this case, courts are becoming more and more lax about applying the law. Instead of the law being equal for all it is increasingly enforced subjectively and based upon the whim of the judge hearing the case. Instead of looking at the case law often, courts just look at the sympathetic party who has contracted away their rights in a marriage and seek to use facts that are meaningless to reverse engineer a decision that suits the goals of the court rather than the law. According to the law, if a contract is not one sided or a product of fraud, coercion, or duress, then the courts will simply apply the terms to which the parties agreed. The rule of law should not be bent to the point where there is no real rule of law simply because the court feels bad for one of the parties.
Getting Legal Help with a Family Law Matter in New York
Spouses should be careful in making investments on their own during a marriage. Specific agreements that address what will happen if a divorce occurs can be extremely helpful. Keep in mind, however, that the courts may not always enforce these agreements if the contracts are determined to be unjust or unfair. Nonetheless, having an agreement is better than not having one at all.
If you are facing a complicated family law issue, call Levoritz Law Firm at 718-942-4004.