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Aug 15 2017

Unfair Results in Non-marital Property

There are some common situations in which application of non-marital property rules leads to unfair results. For example, one spouse may have spent non-marital assets on living expenses and cannot trace the funds to any existing asset. The other spouse spent a comparable amount of non-marital assets on an asset that exists and thus the funds can be traced. In some cases, the parties will discuss whether or not they think the applicable law is fair in this situation and will either agree to drop the non-marital claim or to give each a comparable non-marital claim to an existing asset.

Another recurring situation involves a premarital interest in real estate to which marital payments were made, reducing the mortgage principal during the marriage but, because of the declining real estate market, there is now only equity sufficient to cover the premarital interest. An alternative approach would take into consideration both the non-marital and marital contributions and allocate the non-marital and marital interests proportionate to those contributions. Again, the client agreeing to a deviation from the applicable law on calculation of non-marital assets, should be clearly advised of how that law would apply to his or her situation.

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