Might You Be Entitled to a Distributive Award of Property in Your Divorce Case?
What Constitutes Normal Property Division in a Divorce?
When a divorce occurs, property and assets are to be split equitably by the Court which typically involves a 50/50 split. This approach generally covers all property obtained during the marriage. This is true regardless of the basis (or grounds) for the break-up of the marriage.
What Happens if One Spouse Commits Financial Misconduct?
Unfortunately, sometimes a party anticipating a divorce will commit acts of fraud, concealment or transfer property to avoid dividing any assets. When this type of conduct occurs and it can be sufficiently proven, courts may order an unequal division of property and issue a “distributive award”. The courts are given broad discretion in deciding how to separate the assets, and this discretion is given significant deference on review by appellate courts.
Statutory Definition Regarding Property Division in a Divorce:
ORC 3105.171 states that in a divorce or dissolution:
“(3) The court shall require each spouse to disclose in a full and complete manner all marital property, separate property, and other assets, debts, income, and expenses of the spouse.”
The statute clearly states a very succinct and definite statement; the words “in a full and complete manner” leave no wiggle room. But, all too often parties are not truthful. The statute goes on to say:
“(4) If a spouse has engaged in financial misconduct, including, but not limited to, the dissipation, destruction, concealment, nondisclosure, or fraudulent disposition of assets, the court may compensate the offended spouse with a distributive award or with a greater award of marital property”
Ohio courts have recognized that an equal division of property is not always an equitable division, and therefore, not appropriate. While there is no set “definition” when it comes to what exactly amounts to “financial misconduct” which is the term used to describe section 4 of the statute listed above, there are a few cases where the court specifically classifies certain types of behavior as “misconduct.”
In Feldmiller v. Feldmiller, the 2nd District Court of Appeals went into detail to help define “financial misconduct” and when it is appropriate for a court to issue a “distributive award”. In Feldmiller, the court first defined a distributive award, stating:
“Distributive award” means any payment or payments, in real or personal property, that are payable in a lump sum over time, in fixed amounts, that are made from separate property or income, and that are not made from marital property and do not constitute payments of spousal support, as defined in section 3105.18 of the Revised Code.”
The court went on to discuss when the financial misconduct portion of the statute should apply, stating:
”The financial misconduct statute should apply only if the spouse engaged in some type of wrongdoing”
The court then continued to state that a spouse who is engaged in wrongdoing will either profit from the misconduct or intentionally defeat the other spouse’s ability to benefit from the assets.
The facts in Feldmiller were that the husband was terminated from his job. The trial court held that this termination amounted to financial misconduct because the termination harmed the wife in allocating spousal support. Upon review though, the appellate court made it clear that termination for cause from a job does not demonstrate financial misconduct. The appellate court held that distributive awards are to compensate in property division and are not applicable to alimony considerations. For these reasons, the appellate court overturned the financial misconduct finding by the trial court.
This case illustrates two points that are beneficial in the discussion of a distributive award. One main point is that there must be significant “wrongdoing” which causes one party to benefit or deny the other party the ability to benefit from marital assets. Second, a distributive award cannot be used for a spousal support payment.
Divorce Property Conclusion:
Divorces can become very messy if a spouse is hiding assets. If you suspect that your spouse has committed financial misconduct or is concealing assets, be sure to hire an experienced and aggressive divorce lawyer to protect your interests! To learn valuable tips to uncover ways that individuals may attempt to hide income and assets during a divorce, please read our divorce whitepaper on the subject. Finding Hidden Income/Assets During a Divorce can be downloaded at no cost from our Holzfaster, Cecil, McKnight & Mues website: http://www.hcmmlaw.com/downloads/free-divorce-and-estate-planning-white-papers
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Robert L. Mues
Robert Mues is the managing partner of Dayton, Ohio, law firm, Holzfaster, Cecil, McKnight & Mues, and has received the highest rating from the Martindale-Hubbell Peer Review for Ethical Standards and Legal Ability. Mr. Mues is also a founding member of the "International Academy of Attorneys for Divorce over 50" blog.