January 28, 2010
$17 Million Contingency Fee Marital Property Subject to Equitable Division
The Tennesee Supreme Court has ruled that a $17 million class action settlement fee received by a husband-attorney after his wife filed for divorce is marital property subject to equitable division. The decision is consistent with the wealth of jurisprudence on marital and community property - acquisitions that are the result of effort, skill, or industry expended during marriage should be susceptible of being shared. But to reach this decision, the Court had to creatively interpret a Tennessee statute which requires that property be "owned by either or both spouses as of the date of filing of a complaint for divorce" to qualify as marital property.
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There are exceptions to the general rule that nonmarital property is exempt from equitable distribution. Sometimes, a spouse will allege that the otherwise separate property of his or her spouse was "transmuted" into marital property. These types of claims are known as "transmutation" claims. A party who claims that his or her spouse has transmuted presumptively separate property (e.g., inheritances or premarital assets) bears a heavy burden because it must be shown that the spouse engaged in specific conduct evidencing his or her intent to treat that the asset is part of the marriage.
Posted by: buying investment property | Oct 22, 2010 11:34:18 PM