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Question #251:
My wife and I are in the process of getting divorced in NY after 16 years of marriage. There were infidelities involved with her but she just says she was unhappy.
It really doesn’t matter anymore but the horror is just beginning. WE have 3 beautiful children all under 13 and I just want to be able to start a new life for them and myself.
My question is whether premarital stocks that appreciated can become marital with the following description of active appreciation.
My wife has long been a registered trader and broker and has managed her investment account since we have been married. She had stock gifted to her before we were married.
She managed this account that included a substantial amount of a stock that has split and paid dividends. As a stay at home trader she actively bought
and accumulated shares of the stock over the years from the dividends and interest. Unlike a mutual fund though it was not automatic and she actively bought and placed the trades.
The stock was never in my name but dividends and interest was used for living expenses at times of need. The entire account was managed
by her and was considered our retirement and nest egg. Since I earned a living enough to support our family she worked as a satellite office in the house for many years up until late as the market conditions deteriorated.
She now manages the account via Etrade but it is still all in her name. The account is still under her name and contains many other stocks accumulated during our marriage.
In addition in past years commissions were paid and deposited into this account and the monies were utilized to purchase more stocks and other products within the account.

The question now becomes whether the active participation of the entire account including the trades and purchases of more stock via dividends and the depositing of the earned income into the account
creates it as a marital asset rather than separate property. The debate is whether the appreciation of the premarital stock amount is eligible for equitable distribution and if the entire account would be
as well, due to the comingling of earned income to the account.
I am also questioning if I need to look at this as one total account itself or as each individual asset for distribution.

All of my earned income was utilized for everyday living expenses and any joint monies has been depleted. Savings was also minimal as we were overextended and never thought to put money away in both our
names since we did treat the investment account as our own. Now with divorce imminent, I am fighting for a new life and a new start. But to walk away with nothing and she gets to keep what she had over all the years just doesn’t sit right.

Any input would be greatly appreciated .

You raise an interesting question that involves a detailed analysis of the stock investments that your wife has made over the course of your marriage and the amount of time she has devoted to overseeing her portfolio. To the extent that she has extensive professional training and experience in investments, and devoted her working time to this endeavor, there may be some marital interest in the profits generated by such time and effort. The initial investment, being held in her name only, however, will most likely be deemed separate property.

I strongly recommend that you consider mediating your divorce, and if you are living in the New York City metropolitan area, please call me at 212-370-1660 to discuss the matter at greater length.

Leonard M. Weiner, Esq / Divorce Solutions
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