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Wednesday, June 11, 2014

New York Court Wrangles With Asset Division With One Spouse Deceased

While divorce isn't always inevitable, death is. Unfortunately, sometimes the two intersect.

In many cases, this frankly simplifies matters. For example, there is usually no longer a need to battle an estranged spouse on matters of child custody, visitation or maintenance costs.

However, Brooklyn divorce attorneys recognize there are many situations in which a death in the midst of divorce could make matters more convoluted. Take for example the Yonkers case of Bordas v. Bordas.

She was a Naval reservist who had retired from the military to become a high school social studies teacher. He was also a teacher, which was how the pair met. They married and had two daughters.

But then, in 2012, after more than a dozen years of marriage, the husband filed for divorce, citing an irretrievable breakdown of their relationship. Less than six months later, the 38-year-old wife committed suicide after consuming a lethal mix of prescription drugs.

That might have ended proceedings right there. However, the widower then learned that his deceased wife, before she died, removed him as a beneficiary from her retirement account and life insurance policies. Instead, she named their two daughters, ages 10 and 13, as beneficiaries. This alone might not have been a major issue, but for the fact that she indicated if something happened to the girls, the entire $500,000 payout should go to her boyfriend.

Soon after, the widower filed a motion in the divorce case, which was still pending, arguing that the transfer of money and assets prior to her death violated legal guidelines. Generally, those assets and accounts would be considered marital property, meaning it would be subject to equitable division.

However, the fact that she is deceased could mean the husband won't be able to do much about it. A Westchester state Supreme Court justice called the wife's actions "regrettable," noting that the wife had seemingly "reached beyond the grave" to stymie her estranged husband's efforts to recover his share of assets, he said there was simply nothing the court could do to remedy the violation.

An attorney representing the husband called the ruling "unfair" in a quote offered to the New York Post. She said an appeal may be the appropriate next step. She cited other examples where courts will seek to hold people responsible for actions even after their deaths. For instance, police may issue a citation to a deceased drunk driver who caused a crash resulting in injury and death to others.

While a criminal trial might not proceed such action, a civil trial might.

There is evidence to suggest the ruling in this case is outside the norm. Many states have held that the death of a spouse during divorce results in the termination of continuing maintenance payments, they have also generally held that the surviving spouse should still at the very least receive his or her fair share of the marital property. In some instances, lump sum alimony awards have been granted from the deceased party's estate.

Additionally, surviving spouses can't assume that the divorce action will be dropped entirely after a death.

Though the assets acquired during the marriage might be in both party's names, once the divorce action is filed, equitable interest in the property becomes vested as part of the estate, and may still be divided. Whatever is left in your former spouse's estate might then go to any beneficiaries he or she has named.

Of course, you can't know at the beginning of a divorce proceeding whether death is on the horizon for either of you. Preparing for the possibility by hiring an experienced divorce attorney will assure you that in the event of an untimely passing, your interests will be defended.

If you are contemplating a divorce in Brooklyn, call our offices at (718) 864-2011.

Additional Resources:

Judge denies man's divorce asset claim a year after wife's suicide, May 26, 2014, By Julia Marsh and Erin Calabrese, The New York Post

More Blog Entries:

White v. Howard - Life Insurance Policy May be Considered a Form of Alimony, May 26, 2014, Brooklyn Divorce Lawyer Blog


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