Assembly Bill A6194

                                BILL NUMBER:A6194               REPLACEMENT 5/21/10

TITLE  OF  BILL:    An  act  to  amend  the domestic relations law, in
relation to the definition of marital property

PURPOSE OF BILL:  To include in marital property subject to  equitable
distribution upon dissolution of the marriage all property transferred
or  encumbered in contemplation of a matrimonial action without a fair
consideration.

SUMMARY OF PROVISIONS OF BILL:  Domestic Relations Law Sec. 236 B 1 c.
is amended to expressly include in the definition of marital  property
any  property  transferred  or  encumbered in contemplation of divorce
without a fair consideration.  Any property transferred or  encumbered
within  two  years  of  the  commencement  of  a matrimonial action is
presumed to be in contemplation of a matrimonial action, if it is made
without fair consideration.

EFFECTS OF PRESENT LAW WHICH THIS BILL WOULD ALTER:  Present law  does
not  include  transfers  not  for  value in marital property. The only
reference to transfers within two  years  of  the  commencement  of  a
matrimonial  action is that a party must disclose all transfers not in
the ordinary course of business pursuant  to  domestic  relations  law
sec. 236 B 4.

JUSTIFICATION:    Under  current law, it is possible for one spouse to
              

dissipate marital assets in contemplation  of  a  matrimonial  action,
thereby  preventing the other spouse from receiving an equitable share
of the marital property.

Clearly, this was the situation in JOLTS V. JOLTS,  111  Misc.2d  311,
where  the wife was denied a share in property in Arizona purchased by
the husband shortly before the commencement of the matrimonial  action
and  placed  by  him  in  the  name of a paramour. The problem of such
transfers is analogous to the situations which existed prior  to  1966
in  the  spouse's  right to elect against the will of the other spouse
under the estates law. Prior  to  1966,  the  right  of  election  was
restricted  to  those  assets  which passed under a decedent's will. A
decedent, therefore, could defeat a  spouse's  right  of  election  by
transferring  property  while living, resulting in no, or a diminished
estate.   Similarly, by transferring assets  prior  to  or  after  the
commencement  of a matrimonial action, without adequate consideration,
and other than in the regular course  of  business,  marital  property
could be diminished.

The  post  1966  right  of  election  (EPTL  sec.  5-1.1)  expands the
definition  of  "net  estate"  to  include  testamentary   substitutes
including:  gifts  in  contemplation  of  death;  joint bank accounts;
Totten trust; property held in joint tenancy;  and  property  held  in
tenancy  by  the  entirety.  This  expansion  of the right of election
increases the assets which would be  part  of  the  decedent's  estate
against which the surviving spouse may exercise the right of election.
Thus,   there  are  precedents  in  New  York  for  the  recapture  of
transferred property.


Clearly, one spouse should not be permitted  to  defeat  an  equitable
distribution  by  fraudulently transferring marital assets prior to or
after the commencement of a matrimonial action.  The  outcome  in  the
JOLTS case should not be repeated.

LEGISLATIVE HISTORY:
2009: A.6194/S.2973 - A. Judi/S. Judi
2007-08: A.2991 - Assembly Calendar
2006: A.9924 - Passed Assembly
2005: A.6066 - Assembly Judiciary (Assent. Sanders)
2003-04: A.1929 -Passed Assembly (Assent. Sanders)
2001-02: A.558 - Passed Assembly (Assem. Sanders)
1999-00: A.654 - Passed Assembly (Assem. Sanders)
1997-98: A.729 - Passed Assembly (Assem. Sanders)
1995-96: A.870 - Passed Assembly (.Assem. Sanders)

FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None.

EFFECTIVE DATE:
This act shall take effect immediately and shall apply to all actions
or proceedings pending on or commenced on or after such effective date.