Forstmann MacKenzie v. MacKenzie

Wife challenged the superior court’s property distribution, including its award of property in lieu of spousal maintenance, in this divorce action. The parties began a romantic relationship in 2002 when they were both married and had children. Their respective divorces were finalized in the spring of 2004, and they began living together, marrying in June 2007 and separating in February 2014. No children were born of the marriage, which was the second for both parties. Wife brought into the marriage assets totaling approximately $1.8 million, most of which she obtained through her divorce from her first husband. Husband brought into the marriage between $4.4 and $5.4 million in assets, which he accumulated through his work in the financial services industry from 1985 to 2000. To preserve wife’s spousal support from her first husband, the parties initially kept their finances separate. They did not open their first joint bank account until early 2008, six months after they married. The superior court issued its divorce order in October 2016, concluding it would be inequitable to simply apportion the marital estate by the percentage each party brought into the marriage, even though the marriage was relatively brief. The court concluded that it was appropriate and preferable to award wife additional property in lieu of maintenance, considering “the substantial size of the marital estate, the acrimonious state of the parties’ relationship, and the brief duration of the marriage.” On appeal, wife argued that: (1) the court erred in failing to consider the length of the parties’ premarital relationship and cohabitation in establishing its property distribution and maintenance award; (2) by awarding her an undifferentiated lump-sum payment that was partially property settlement and partially a maintenance award, the superior court failed to explain how its division of marital assets was equitable and whether the unspecified maintenance award would enable her to continue the lifestyle established during the marriage; and (3) the court made multiple errors in valuing the marital estate. Given the facts and circumstances of this case, the Vermont Supreme Court concluded the superior court acted within its discretion in not including the parties’ premarital relationship and cohabitation period in calculating the duration of the marriage as a factor in determining an equitable property distribution and just maintenance award. The Court was compelled, however, to remand the property distribution to the superior court for further consideration and findings with respect to what property was to be included in the marital estate and how it was supposed to be allocated: “the court at times seemed to suggest that it considered all of husband’s deferred compensation earned in 2013 and 2014 to be a marital asset subject to distribution and that it was awarding all the remaining unvested deferred compensation to husband. On the other hand, the court repeatedly stated that any of the deferred compensation acquired after the date of the parties’ separation is not a marital asset subject to distribution between the parties.” View "Forstmann MacKenzie v. MacKenzie" on Justia Law