Thursday, October 1, 2009

Equitable Distribution and Inheritance

Daphne Speck-Bartynski v. Robert Bartynski - A Discussion
[Unpublished Decision of the Appellate Division - Decided September 25, 2009]

The facts in brief: After twenty-two years of marriage and raising two adult children, the parties divorced on July 23, 2008. At the time of the divorce, the husband earned $115,000 per year and the wife was a full-time homemaker.

The parties entered into a settlement agreement, providing for permanent alimony in the amount of slightly more than $30,000 per year. The parties also agreed to the majority of equitable distribution, including valuations on property, custody, parenting time, and child support. Only one issue with regard to equitable distribution remained.

In 1998, the husband received an inheritance, the majority of which was commingled with marital funds. It was used to purchase investment accounts and the parties' summer home. After the complaint for divorce was filed, the wife used a portion of the funds to purchase her post-marital home, an "advance" on equitable distribution according to the settlement agreement. In addition, a portion was lent to the wife's brother, some deposited in a bank account, and $120,000 was used by the wife to pay down the mortgage on the marital home.

The payment of the mortgage spurred the husband to curtail the wife's access to the funds by requiring two signatures on all large withdrawals. He sought to preserve the funds for the parties' children and grandchildren.

The issue before the trial court was the percentage of property allocated to each of the parties. Following a hearing, the court ruled that the fair market value of the summer home, the money used to pay off the marital home mortgage, and the balance of the loan owed by the wife's brother were to be divided equally.

The other assets purchased with the inheritance funds, the two investment accounts, the bank account, and the fair market value of the wife's post-marital home, would be divided with 2/3 going to the husband and 1/3 going to the wife. It is from this portion of the court's decision that the wife appealed.

The issues: Should the assets purchased with the commingled inheritance funds have been divided equally?

The court's holding: The Appellate Division affirmed the trial court's decision.

The general rule is that an inheritance is not subject to equitable distribution. Had the husband kept these funds separate from marital funds, they would have been his alone at the time of divorce. However, because the funds were commingled with marital monies, they do become subject to equitable distribution. That said, the trial court is permitted to allocate some weighted amount of distribution, as it did here.

The trial court has broad discretion regarding the division of marital assets, and its determination cannot be touched by an appellate court as long as the trial court could have reasonably reached its result from the evidence presented. The appellate courts cannot disturb the division just because it is unequal, unless a legal or factual mistake has been made. It is the moving party, in this case the wife, who bears the burden of proving an abuse of discretion.

In this case, the trial judge considered all of the necessary statutory elements with regard to equitable distribution, as well as the evidence, and could have reasonably placed significance on the husband's much larger contribution to marital assets through inheritance, as well as his intention to limit the wife's use of those assets as demonstrated by the change to the signature requirement. There was nothing permitting the Appellate Division to interfere.

The end result: The distribution of assets remained as the trial judge had directed.

What does all of this mean to you? While an inheritance belongs solely to the heir for purposes of equitable distribution, if funds are commingled, they can be distributed between the parties. However, the non-heir party cannot necessarily expect that he or she will receive a full 50% of a commingled inheritance.


  1. The case facts are not entirely accurate. The "summer home" was an investment property that was rented out for the summer that Daphne managed to give income to her family while doing volunteer work as well as being a homemaker. The money that was lent to her brother was after he had completed major work on the investment property and he gave Bob the keys to his house as collateral.

  2. The facts of the case as I stated them were taken directly from the court's written opinion and were the facts upon which the court based its opinion. The details you have added don't change or add anything that would alter the court's reasoning and were therefore not included in the court's opinion.


Related Posts with Thumbnails