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Dissolution of marriage Equitable distribution Marital/nonmarital assets Cut-off date

Posted by John P. Rutkowski | Nov 11, 2019 | 0 Comments

Trial court erred in using the parties' date of separation as the cut-off for determining marital assets where there was no valid separation agreement between the parties. Where no valid separation agreement exists, cut-off date for determining marital assets is the date on which the petition for dissolution of marriage was filed. Revocable trust which former husband established and funded prior to the marriage did not become a marital asset when the funds were transferred from one investment company to another during the marriage. The switching of assets from one company to another is not the acquisition of new assets during the marriage as contemplated by statute. Placement of certain trust funds into parties' joint account upon liquidation transformed those commingled funds into a marital asset. Trial court erred in determining that the liquidated trust funds were not commingled with marital assets because it was not former husband's intent or choice to place the funds into the joint account, but rather a result of the investment company's refusal to send money to former husband's separate brokerage account. Determining intent is difficult, and applying bright line rule that nonmarital assets lose their nonmarital character when they have been commingled with marital assets is the best approach. While application of bright line rule may appear harsh, trial court may consider the totality of circumstances in determining whether unequal distribution of marital assets is justified after properly classifying assets as marital or nonmarital. Based on scant record and lack of findings regarding the parties' joint account and the nonmarital investment account where the commingled funds were subsequently placed, appellate court cannot determine whether this commingling resulted in entire nonmarital investment account becoming a marital asset. Deposit of the funds does not necessarily make the entire account marital. Remand for entire equitable distribution scheme to be reevaluated using date that petition for dissolution was filed.

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About the Author

John P. Rutkowski

Mr. Rutkowski has been practicing law for the past twenty-four years. Prior to going to law school Mr. Rutkowski served as a deputy sheriff before retiring to attend law school. Upon graduating law school Mr. Rutkowski served as a prosecutor in Florida before going in to private practice.

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