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Separate vs. marital property, Part 2: a recent court case

On Behalf of | Jul 6, 2017 | Firm News, High Asset Divorce

Even when it seems straightforward and a seemingly simple legal call to make, it can take a sharp turn and end up being denoted as something else.

Such is the realm of property in a divorce proceeding, which can be surrounded by complex factors that throw a proverbial wrench into judicial judgment calls evaluating whether assets in play are deemed property that is divisible between divorcing spouses or one spouse’s separate property.

We note on our Little Rock family law website that, “Property acquired during a marriage is typically defined as marital property.”

There is considerable wiggle room in that, though, and we duly note on our site the “exceptions” that can apply when a court is determining whether assets should be divided in an Arkansas divorce or decoupling elsewhere.

A recent appellate case ruling handed down by the Georgia Supreme Court illustrates well the complexity that can attach to separate-or-marital divorce disputes in states — like Arkansas — where marital property is subject to equitable property division.

In that case, a man took out a disability insurance policy following marriage, with premiums being paid through marital funds jointly owned and managed by that individual and his wife. In such a case, courts have often determined that benefits flowing from a policy payout are marital property.

The Georgia court held a different view, though, notwithstanding the payment source for the premiums and the fact that funds paid out following a devastating disability suffered by the husband were deposited into accounts jointly held by the couple.

The couple subsequently divorced and entered litigation focused upon whether the insurance proceeds were non-marital assets held by the former husband or whether his ex-wife had a right to claim an equitable share of the payout as marital property.

The court ruled in favor of the husband pursuant to a stated “analytic approach” that the justices stated transcended “a formalistic view which looks only to the timing of the acquisition.”

The court stated that the purpose of the award was narrowly centered on providing upkeep for the policyholder in his disabled state, and not to help the couple owing to lost wages/earning capacity and other accrued expenses.

Property division determination and outcomes in a divorce can often resolve around complex considerations. A party with questions or concerns regarding the topic might reasonably want to contact an experienced family law attorney well experienced in asset-related matters.


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