One question we get regularly, is whether a certain piece of property or account is ‘marital property.’ In order for something to be marital property, generally, it must be property that was acquired during the marriage. For certain items, such as a house, bank account, car, etc. it is easy to determine whether it is marital property, based on its purchase date, and subsequent change in value, and the reason for the change in value.
For example, if one party owned a house prior to the marriage, but during the marriage the parties jointly put money into renovating the home, thereby increasing its value, that house is partly marital property. But, if one party owned a house prior to the marriage and the value of the home increased solely due to changes in the real estate market, then it is not marital property.
What about things like airline miles, credit card points, retention bonuses, and awards from workers’ compensation claims or personal injury claims? These are generally things that either are received in cash or are used in lieu of cash, so are these marital property, and if so, how is their value determined for purposes of an equitable distribution?
Marital property, if intangible such as airline miles or credit card points, must be transferrable, and must be capable of being converted into a monetary amount. Owners of such accounts must be careful to read the policies of the individual programs to see if points are transferrable. Also, it is best if the parties can agree on a value for these types of accounts or to agree to a work-around if the points are not transferrable.
Awards for personal injury or workers’ compensation claims can be both marital and non-marital property. If any part of the award is for lost wages or earning capacity during the marriage, medical expenses paid from marital funds, or for the joint loss of consortium, then that part of the award would be considered marital property. Any part of the award that is for compensating something personal to the award recipient, such as compensation for the actual personal injury, those funds are personal to the recipient and therefore not marital property.
Retention bonuses are generally marital property, because their purpose is to be another form of compensation to the employee. This classification of marital property takes into account that the retention bonus is not characterized as compensation on the employee’s pay statement.
As our world becomes more technologically advanced and more property is held only in an intangible, electronic form, lawyers are becoming more creative to find simple solutions to new questions.