A Michigan man recently found himself on the wrong end of the waiting game in a divorce proceeding. Rich Zelasko and his wife, Mary Beth, began divorce proceedings in 2011; however, their divorce was not finalized until 2018. In 2013, Mr. Zelasko was the lucky winner of an $80 million-dollar lottery jackpot. His attorneys argued that the lottery winnings should be considered Mr. Zelasko’s separate property because the parties were physically separated at the time he won the jackpot. The Michigan Court of Appeals disagreed, upholding an arbitrator’s decision that Mr. Zelasko’s lottery winnings were part of the marital estate. As the Court noted in its opinion, “marital property includes all property acquired from the date of marriage until the date of entry of the divorce decree. Property that is acquired between separation and actual divorce is marital property.” Zelasko v. Zelasko, No. 342854 (Mich App 2018), citing Byington v. Byington, 224 Mich App 103 (1997).
Tennessee law is very similar to Michigan law with respect to the definition of marital property. Tenn. Code Ann. § 36-1-121 provides that:
(b)(1)(A) “Marital Property” means all real and personal property, both tangible and intangible, acquired by either or both spouses during the course of the marriage up to the date of the final divorce hearing and owned by either or both spouses as of the date of filing of a complaint for divorce, except in the case of fraudulent conveyance in anticipation of filing, and including any property to which a right was acquired up to the date of the final divorce hearing, and valued as of a date as near as reasonably possible to the final divorce hearing date.
(B) “Marital property” includes income from, and any increase in value during the marriage, of property determined to be separate property in accordance with subsection (b)(2) if each party substantially contributed to its preservation and appreciation and the value of vested pension, retirement or other fringe benefit rights accrued during the period of marriage.
Litigants often believe that filing a Complaint for Divorce or physically separating “freezes” the parties’ positions and assets at the time of that event. In reality, this is not true. You are not divorced until you are divorced, and the passage of time can confer significant benefits – or detriments – to you and your case. If the Zelaskos had divorced in Tennessee, it is likely that the courts here would have rendered a decision similar to the Michigan court, deeming the lottery winnings to be marital property subject to an equitable division between the parties.
The passage of time can affect nearly every aspect of a divorce. Two areas commonly impacted are:
*Retirement Accounts: Increased balances in retirement or investment accounts. Tennessee courts will divide these accounts, as with all marital property, as of the date the divorce is final. Combine a few good years in the stock market with a divorce that takes years to complete, and you have a situation where one spouse is very pleased with the additional assets in his or her column while the other spouse is upset that their case was not concluded sooner.
*Bonuses and Commissions: Lump sum payments received by one party during a protracted divorce may feel like the other spouse is getting an unfair windfall.
*Acquisition of Real or Personal Property: Unless it was a gift or acquired with proceeds that are separate property, any real or personal property obtained during the pendency of a divorce will be marital property subject to an equitable division even if the spouses are separated.
Tennessee courts consider many factors when awarding alimony, including the age and health of the candidate spouse. If the passage of time yields a cancer diagnosis, or perhaps a debilitating accident, then a spouse who would not have otherwise had any alimony claim may be transformed into a lifetime alimony candidate.
Time marches on, and you need an attorney who will make sure you are on the right side of that truism if you are going through a divorce. Here at Kious, Rodgers, Barger, Holder, and King, PLLC, we do our best to provide compassionate guidance and reassurance to our clients throughout the divorce process. If you are considering filing for divorce and would like to know more about your options, please call our office and set up an appointment for a consultation.
This month’s post is by Attorney and Rule 31 Listed Civil Mediator Loren A. Sanderson. Loren focuses her practice on family law, including divorce, child custody, child support, and adoption.