Articles Posted in Property Division

Jurisdictions across the United States have different laws and traditions concerning how property is divided during a divorce. Generally, judges are not required to follow any strict formula for property division; however, the guidelines and laws offer factors for courts to consider in awarding property to each spouse. Rhode Island courts divide marital property using the doctrine equitable distribution, meaning a court divides marital property in a fair and equitable manner between the spouses, taking several factors into account to determine the equitable distribution for each spouse.

The division of marital property in Rhode Island is governed by state law, codified under R.I. GEN. LAWS § 15-5-16.1, which lists several factors for judges to consider in property division. These factors include the length of the marriage, the conduct of the parties during the marriage, contributions from each party to the marital estate, the contributions of each party as a homemaker, the occupation and employability of each party, and the best interests of any children shared by the parties, among others factors.

In evaluating the conduct of the parties during the marriage, courts are allowed to consider any infidelity or abuse in making an equitable distribution of the marital assets. Additionally, financial misconduct by either party (wasteful dissipation of assets or hiding or encumbering assets in anticipation of divorce without equitable consideration) can be grounds for awarding more property to the other spouse.

The term equitable distribution refers to how a court divides up a couple’s assets in a Rhode Island divorce. Rather than split a couple’s assets down the middle 50/50, courts consider a variety of factors when determining how to divide assets and liabilities. The concept behind the doctrine of equitable distribution is that marriage is viewed as an “economic partnership” between two people. Thus, courts attempt to award marital property according to the contributions each party made to the “partnership” during the marriage. Most types of property can be subject to equitable distribution, including real estate, cars, artwork, furniture, bank accounts, business interests, and even retirement accounts.

The equitable distribution process requires Rhode Island family law judges to engage in a multi-step analysis. First, the judge must determine what constitutes marital property. Courts consider marital property any property that was acquired during the marriage, with a few exceptions. While property that was owned by one spouse before the marriage is not typically considered marital property, any increase in value that occurred during the marriage may be subject to equitable distribution. Inherited property is not considered marital property, nor is any income received from such property. However, gifts between spouses are marital property.

Once a judge determines which of the couple’s assets are marital property, she will then consult the list of factors contained in Rhode Island General Laws section 15-5-16.1, including:

The issue of how a couple’s assets and liabilities are divided up is one of the most contentious issues in many Rhode Island divorces. Indeed, it is not as simple as merely dividing everything in half. Instead, Rhode Island uses an equitable distribution model when determining what each spouse is entitled to after a divorce is finalized.

Typically, an equitable distribution framework consists of three parts. First, a court must determine which assets are considered marital property. Importantly, nonmarital assets are subject to equitable distribution. However, the determination of whether something is a marital or nonmarital asset is not always straightforward.

Marital Versus Nonmarital Property

Generally speaking, most assets acquired during a marriage are marital property. However, inheritance, gifts, and proceeds from lawsuits are not typically considered marital property even if they are received during the marriage. Thus, in a recent Rhode Island divorce case the court determined that a car that was purchased during the marriage with funds that Wife was gifted by her parents before the marriage was not marital property subject to equitable distribution. The court also determined that a subsequent gift from Wife’s parents to Wife was considered nonmarital property although it was deposited in the couple’s joint bank account.

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One of the most contested issues in any Rhode Island divorce is the division of property. While the concept of dividing up a couple’s assets may sound straightforward, in practice the process can be quite complicated.

Rhode Island is an equitable distribution state. Thus, courts employ a three-step approach when dividing marital assets. First, the court will determine which of the couple’s assets should be considered marital property subject to equitable distribution and which assets are an individual spouse’s separate property. As a general rule, marital property consists of the assets that were acquired during the marriage. However, certain exceptions exist. For example, inheritance and gifts from third parties are not considered marital property, even if they are assigned or received during the marriage.

Once a court determines which assets are marital property, the court will then consider a list of factors to determine how to divide those assets. These factors are set out in Rhode Island General Laws § 15-5-16.1, and include:

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In a case heard by the Rhode Island Supreme Court, the court evaluated a lower court decision involving hidden assets during a divorce. The parties were married for about nine years by the time the divorce was finalized. The divorce trial took 12 days and the decision issued was 59 pages. The family court magistrate issued its decision in March of 2016 with findings that included that there were irreconcilable differences and the breakdown of the marriage was irremediable. Thus, the divorce was granted.

However, a couple of months after the magistrate issued their decision, the wife filed a motion to allow further evidence to alter or amend judgement. In this motion, the plaintiff argued that there was newly discovered evidence that showed her ex-husband had concealed financial information during the divorce proceedings. The magistrate dismissed all of the issues except for one. The remaining issue involved the defendant’s failure to disclose at trial that he had sold a specific piece of property referred to as the Tourtellot property.

The defendant had purchased the Tourtellot property before the marriage using his own separate funds. However, during the marriage the plaintiff had helped to improve the property, which increased the value. Therefore, the magistrate found that the failure of the defendant to disclose during the trial that the property was sold affected the rights of his ex-wife. The magistrate then compensated the plaintiff by awarding her 60% of the difference between the purchase price and the sale price of the property. He also ordered her ex-husband to pay this amount in one lump sum.

When a couple gets divorced, one of the first things the court needs to figure out is which property is marital property and which property is separate property. Typically, any property brought into the household during the marriage will be considered marital property. The biggest exceptions to this rule are when the property is given as a gift or bequest to only one of the spouses. Rhode Island is an equitable distribution state, which means that marital property is split “equitably” between the parties during a divorce. It’s important to have a basic understanding of these concepts because it is how the court decides which property is subject to division. Of course, laws can be complicated and only a qualified Rhode Island divorce attorney can give you a true sense of how a court is likely to split property between a couple.

Post-Employment Compensation

In the vast majority of cases, future earnings are not considered marital property and are thus not subject to division. However, this does not count compensation that was earned during the marriage which will be paid later. For example, if one spouse participates in a 401k employer match program, the money put into the account by both the employer and the spouse (including the interest that is earned) will usually be subject to division. However, any contributions by either the employee or employer (as well as the interest from those contributions) after the marriage ends will typically be the sole property of the employee spouse.