In a case before Justice Stacy Bennett sitting in a Divorce Part in Nassau County, a wife brought a divorce lawsuit against her husband. They had been married in 2001. Issues involving parental access, grounds, custody, and all other issues had been decided by the court. The issue presented to Justice Stacy Bennett was whether a personal injury settlement of $1,638,348.90, which had been initiated prior to the marriage was converted from separate property into marital property. And then, if it was marital property, what portion of the marital property would the wife be entitled to?
The wife in this case alleged the personal injury settlement award to the husband was converted and transmuted into marital assets and were no longer separate property. The husband alleged that since the assets involved were all the proceeds of a personal injury award, and personal injury awards are not subject to equitable distribution, all of said assets belonged to him.
Assets Converted Into Marital Property
Justice Stacy Bennett held a trial with regard to this matter. After reviewing the evidence, she found the husband had converted the separate assets into marital assets and therefore these assets were subject to a distributive award.
The usual manner in which separate property assets are converted into marital assets is by putting one’s spouse on an account where those assets are located. Another way of converting them would be to spend them on improving a marital asset, such as the marital residence which is in both parties’ names.
If you want to maintain separate assets, separate and not have them become marital property, you should maintain them in a separate bank account or investment account and not put your spouse’s name on the account.