1. Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved Property and Debt Distribution Chapter 6

2. Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved Basic Principles of Property Real property is land and its affixed structures Personal property is everything else Sole ownership is one individual possessing all the rights Concurrent ownership is two or more owners

3. Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved Concurrent Ownership Tenancy in Common – Undivided interest in the whole property – Equal rights of use – May convey this share by gift, will, or sale – Passes by inheritance to intestate successor or per testamentary instructions – Title frequently used by unrelated co-owners

4. Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved Concurrent Ownership, cont. Joint tenancy – Must buy the property at the same time, title drawn to identify parties as joint tenants – Shares will be equal – survivorship – Transfer of share converts title to “in common”

5. Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved Concurrent Ownership, cont. Tenancy by the Entirety – Only between Husband & Wife – Rights of survivorship – However, neither party can unilaterally end ownership by sale

6. Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved Concurrent Ownership, cont. Community Property – All property or income acquired during marriage is owned equally by both spouses – Some exceptions for gifts, inheritances – Doesn’t apply to property acquired with separate property Marital property (common law analysis) “…[P]roperty acquired during the marriage is presumptively marital property….” – Campbell v. Campbell, 213 A.D.2d 1027, 624 N.Y.S.2d 493 (A.D. 4 Dept. 1995)

7. Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved Pets as Property Awarded in property division Factors can include: – Prior ownership – Relationship to children – Primary “caregiver” Courts will generally not enforce a schedule of visitation Parties may, however, handle this privately

8. Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved Debt Allocation Marital debt is the result of pursuit of a family or marital goal Generally not, if unilaterally acquired in pursuit of illegal purposes (“clean hands”) “When one party is charged with dissipation, he must prove by clear and convincing evidence that the questioned expenditures were made for a marital purpose….” – Szesny v. Szesny, 197 Ill App. 3d 966, 557 N.E.2d 222 (Ill. App. 1 Dist. 1990)

9. Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved Community Property Both spouses acquire an equal interest in all property acquired during marriage – presumption of a 50/50 split All debts incurred by either spouse during marriage are community debts Some state permit adjustment for separate property contributions or in the interests of fairness Upon the death of one spouse, half of marital property passes according to testator’s will or by intestate succession, potentially by-passing the surviving spouse

10. Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved Separate Property Acquired prior to marriage Received by one spouse as an individual (not in the family role of wife or husband) as a gift or inheritance Separate property can transmute into marital property: – Re-titled jointly (gift) – Used for marital purposes – Commingled with marital property (failure to segregate) – Marital effort or funds were used to maintain its value Valid premarital agreement saves separate prop identity of prop acquired during marriage & determines distribution

11. Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved Property Valuations Research or experts needed to determine the Fair Market Value (FMV) In real estate, equity must be determined (FMV less encumbrances) Paralegals frequently maintain an “expert” file

12. Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved Intangible Marital Assets Goodwill – Ability of a business or professional to: retain established customers attract new customers based upon a positive reputation Post-secondary or professional degree – Some states treat it as marital property – Some states use it as part of the basis for a determination of a fair alimony award

13. Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved Intangible Marital Assets, cont. Pensions – Unvested pensions are expectancies, not property – Value of marital contributions during coverture can be determined by Qualified Domestic Relations Orders (QDROs) – The value of the pension can be offset, bought out, the pension can be liquidated, or the non- pensioned spouse can defer receiving a share until distribution (QDRO)

14. Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved Distribution of Property Equitable distribution states – Marital property will be divided equitably, although not necessarily 50/50, and parties retain their separate property (unless a distributive award is ordered by the court) Community property states – Marital property is divided 50/50 and parties retain their separate property, although some states “soften” this rule

15. Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved Access to Marital Assets May be a need for alimony pendente lite if assets are frozen May need access to credit or savings for a retainer to initiate the case Provisions must be made for protecting assets (payment of taxes, necessary repairs), as well as ordinary living expenses

16. Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved Tax Consequences Community property –tax refund is split equally (subject to considerations of equity or fairness) Common law – pending divorce, parties file as previously. If jointly, refund held in escrow until there is agreement. Lump sum property settlement – not taxable event Parties may need to consult accountants or tax experts in unusual situations

17. Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved Bankruptcy/Tort Awards Monetary property settlements over time will be treated as an unsecured debt in a payor’s bankruptcy Compensatory damage awards are generally marital assets, – Replacing marital income (lost wages) – Replacing expenditures of marital funds (car repairs, medical bills, etc.)