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The Marital Property Presumption In New York Divorce Is Alive And Well

On Behalf of | May 1, 2016 | Divorce

    High net worth New York divorces are often battles of documents,  often at the expense of the concept of verasimillitude.  In the jargon of the 12 step programs, “how it works” in New York high net worth divorce is that all property acquired during the marriage is separate property unless the proponent of the separate property meet the burden of proof to establish a separate property credit. 

    In Heine v. Heine, 176 AD2d 77 (1st Dept. 1992), six months after the parties were married, a  $ 267,500 down payment was made for the purchase in the husband’s sole name of a Manhattan townhouse.   Based upon the husband’s uncorroborated testimony, both the trial court and the Appellate Division, First Department awarded the husband a separate property credit for the down payment:

     “Domestic Relations Law § 236(B)(1)(c) defines marital property as “all property acquired by either or both spouses during the marriage and before … the commencement of a matrimonial action, regardless of the form in which title is held.” Since property acquired during the marriage is presumptively marital (Lischynsky v. Lischynsky, 120 A.D.2d 824, 826, 501 N.Y.S.2d 938), the burden of proof is with the party who claims that such property is separate. (See, Raviv v. Raviv, 153 A.D.2d 932, 933, 545 N.Y.S.2d 739.)   Thus, it was the husband’s burden to show that he used separate property to acquire a marital asset.”

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    “[I]t is worth noting that the townhouse was purchased approximately six months after the marriage, lending further support to the husband’s claim that his separate property provided the source of funds for the down payment.  In fact, this circumstance fairly compels the conclusion that the down payment came from his pre-marital assets. Thus, although the husband’s claim of separate property is based, in large part, upon his own uncorroborated testimony, we cannot say that the IAS court’s finding on this point was against the weight of the credible evidence *  *  * (citations omitted).

    On April 27, 2016,  in Mistretta v. Mistretta,  on facts which appear to have been similar,  the Appellate Division, Second Department recited the same test, but reached the opposite conclusion:  

    “Under the Domestic Relations Law, “marital property” means “all property acquired by either or both spouses during the marriage and before the execution of a separation agreement or the commencement of a matrimonial action, regardless of the form in which title is held” (Domestic Relations Law § 236[B][1][c] [emphasis added]; see Raviv v Raviv, 153 AD2d 932, 933), but does not include “separate property,” which the Domestic Relations Law defines as, inter alia, “property acquired by bequest, devise, or descent, or gift from a party other than the spouse” (Domestic Relations Law § 236[B][1][d][1]). Here, the defendant failed to rebut the presumption that the subject premises, which he acquired during the marriage and prior to the commencement of this divorce action for consideration which was in fact paid during the marriage, were marital property (see Raviv v Raviv, 153 AD2d at 933; Lischynsky v Lischynsky, 120 AD2d 824, 826-827; cf. Allen v Allen, 263 AD2d 691, 692).”

    Well informed New York divorce lawyers might wonder if Heine had any vitality after the 2009 Fields decision in the Court of Appeals.   Actually the Heine case was addressed but not disfavored in the Fields decision, 15 NY3d 158 (2010).  The recent Mistretta decision suggests that, in the high net worth New York divorce case, legal counsel might predict that the trial judge will have a measure of trepidation before making a credibility determination in favor of a monied spouse, even though in all likelihood separate property was utilized, but that monied spouse, like Mr. Heine, happens to lack documentary evidence. 


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