I just read a decision that caught my eye and hasn’t let go—for both good and bad reasons. This case, D.C. v. P.C., demonstrates one of the legal principles my clients often find surprising—that, when it comes to dividing assets in a divorce, doing so “equitably” doesn’t always mean “equally”—and shows how important it can be to work with divorce professionals who can help families avoid unpredictable outcomes in court.
D.C. is about the end of a 34-year marriage. Both parties worked throughout the marriage and maintained separate retirement and bank accounts, along with a joint account, into which only the husband made deposits to pay the mortgage and expenses associated with the marital residence. Additionally, the parties consulted with a financial planner about opening a joint brokerage account but the wife decided not to participate in the creation of the brokerage account, so the account was opened solely in the husband’s name.
The couple’s divorce case went to trial, leaving it to the judge to divide their property. The judge ordered the marital residence to be sold and the net proceeds, in addition to the retirement accounts, to be split equally between the parties. But the judge had a different attitude toward the brokerage account. Oddly, the court refused to divide the brokerage account, awarding it solely to the husband.
In my view, much of the judge’s reasoning for that decision is unpersuasive or inconsistent with New York law. But the court did provide one clearly established legal principle to support her decision: “equitable” does not mean “equal” when dividing property in divorce.
Under this principle, courts are not bound to a 50/50 rule when it comes to dividing property. Instead, judges must consider a wide range of factors in fashioning what they deem to be a fair solution. In this case, the judge gave two reasons under New York law that offer a valid basis for awarding the entire account to the husband. First, the wife contributed only modestly to the marriage after the couple’s child became an adult. Second, according to the judge, the wife’s “direct refusal to participate” in the creation of this account supported the husband’s position that it would be unfair to award any portion of this account to the wife.
It is unclear, of course, why these reasons led the judge to divide the rest of the couple’s property but not this brokerage account. That kind of inconsistent reasoning and result is, unfortunately, part and parcel of going to trial over a family’s assets in a court of equity. That’s why I encourage my clients to avoid unpredictable court decisions through alternatives to litigation—like mediation and out-of-court negotiation, both of which permit the couple to decide for themselves how to fairly divide their property. To learn more about these processes, please email me at email@example.com or call me at (646) 491-9008 to schedule an initial consultation.