Plaintiff Wife Not Entitled to Distributive Award of Husband’s Separate Property Which Was Not Shown to Have Appreciated During the Marriage

The Second Department explained the equitable distribution principles applied to separate property which has not been demonstrated to have appreciated during marriage.

Property acquired during the marriage is presumed to be marital property and the party seeking to overcome such presumption has the burden of proving that the property in dispute is separate property” … . The defendant overcame the presumption that funds he deposited into the account of Clark Development, LLC (hereinafter CD, LLC), a company he formed during the marriage, were marital funds by presenting sufficient evidence that the source of the funds was separate property … . Moreover, although appreciation of, or increase in the value of, separate property is considered separate property, “except to the extent that such appreciation is due in part to the contributions or efforts of the other spouse” (Domestic Relations Law § 236[B][1][d][3]), the plaintiff failed to carry her burden of establishing that CD, LLC, as the defendant’s separate property, appreciated in value during the parties’ marriage … . Accordingly, the Supreme Court erred in directing that the plaintiff was to receive a distributive award relating to CD, LLC. Clark v Clark, 2014 NY Slip Op 03224, 2nd Dept 5-7-14

Similar issue and result in Turco v Turco, 2014 NY Slip Op 03257, 2nd Dept 5-7-14