Loss of Inheritance Rights, an Important Factor Upon Divorce

by Elliot Samuelson

New York is an equitable distribution state, which requires the court to distribute property acquired by the parties during the marriage, regardless of how title is held upon divorce. Equitable distribution is far different than community property. California is a notable community property state where the courts have little discretion and must make an equal arithmetic distribution of the parties' marital assets upon divorce. However, in New York , as well as other equitable distribution states, the courts must weigh enumerated factors before they can divide marital property and can make unequal percentage awards, depending on the peculiar facts of each case.

Although the present equitable distribution law which provides for the distribution of marital assets upon divorce was passed in 1980, there have been few decisions in the courts regarding the impact of the loss of inheritance rights upon such divisions. In New York , when a judge decides how to divide property between husband and wife, he must follow the statute that provides eleven enumerated factors to consider, before making a final judgment. Loss of inheritance is one of these enumerated factors. Other factors include the length of time of the marriage, the respective ages of the parties, the abilities of the parties to be self-supporting, their present and future financial prospects and the loss of career opportunities. A judge is called upon to weigh and consider each factor, and must render a written decision stating that each factor has been considered.

It is surprising that after twenty years of dealing with this law, the New York courts have given little attention to the loss of inheritance rights. In some circumstances, it can be a most compelling factor. For example, where a couple are married for a short period of time and one of the spouses accumulated substantial assets prior to marriage and the couple few during marriage, it would seem unfair to divide the marital portion of their property equally especially where one spouse is financially secure and the other not. The loss of inheritance factor was chosen by the legislature in order to prevent injustices to a couple who are married under such economic circumstances as described above. Here, in our illustration, if one spouse had separate assets of $3 million dollars (acquired prior to marriage) and the marital assets accumulated was $100,000, it would not be equitable to simply make an arithmetic distribution of the marital portion rather than awarding to the poorer spouse a larger percentage. The legislature understood that when a spouse died, the survivor was entitled to at least one-third of the deceased spouse's estate even in the face of a will that provided for less, and it appears that they wished to apply this protection to couples who divorce, especially where there are limited marital assets.

However, in order to avail oneself of the benefits of this legislative foresight, it is most important to advance this argument before the divorce judge and urge that this factor be given sufficient consideration to allow a weighted division when finally resolving the parties' distribution of assets.

Perhaps a further illustration will be of help in understanding this concept. A couple marry for the second time, the husband has separate assets including his business valued at over $2,000,000. The wife has no assets and agrees to leave her employment and career path in order to marry. During the marriage assets of but $150,000 are accumulated. After five years of marriage, the parties experience marital difficulties and a divorce ensues. The monied spouse would argue that the marriage was of limited duration and that the Court cannot consider separate property for division upon divorce. The unmonied spouse, of course, would argue that it would be unfair and inequitable not to recognize her loss of inheritance rights to the husband's separate property of $2,000,000 which increased at the time of the divorce to $3,000,000 resulting in the wife being entitled to inherit one third of her husband's estate, or $1,000,000. Since the marital property consisted of $150,000, and the wife left her career, it might be fair in such a case for the Court to grant the wife two thirds or more of the marital property. In such instance both parties would leave the marriage with at least some assets for the future. The husband certainly would have financial security since his separate assets could not be invaded. It might also be reasonable in this illustration for the Court to award the entire marital estate to the wife.

Each case is different and will result in varying adjustments by the Courts. It is important for you to be aware of this, and all other factors and to urge its inclusion into the Court's deliberations.

Elliot Samuelson is the senior partner in the Garden City matrimonial law firm of Samuelson Hause & Samuelson, LLP. Mr. Samuelson is included in "The Best Lawyers of America" and the "Bar Registry of Preeminent Lawyers in America" and has appeared on both national and regional television and radio programs, including Larry King Live. Mr. Samuelson can be reached at (516) 294-6666 or Saillex@aol.com.

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