A Rhode Island divorce lawyer with over 27 years of divorce experience describes what constitutes marital property in Rhode Island subject to the equitable distribution statute.
What assets are not marital property in a divorce? What is separate property? If you are in need of a divorce in Rhode Island, a Rhode Island divorce attorney can help you fight for your legal rights. The pertinent equitable distribution statute in RI is § 15-5-16.1. Assignment of property.
Equitable distribution of assets- the basics
“It is well established that the intent of property division is to provide a fair and just assignment of the marital assets, D’Agostino v. D’Agostino, 463 A.2d 200, 203 (R.I. 1983), on the basis of the joint contribution of the spouses to the marital enterprise. Wordell v. Wordell, 470 A.2d 665, 667 (R.I. 1984). Property division, however, does not require an equal division of the property, Casey v. Casey, 494 A.2d 80, 82-83 (R.I. 1985), and is subject to the concept that nonmonetary, as well as monetary, contributions may enhance the marital partnership. Wordell, 470 A.2d at 667.”
“In dividing property, a trial justice must decide which assets are marital property, consider the contribution of each party, and then distribute the property. Lancellotti v. Lancellotti, 481 A.2d 7, 10 (R.I. 1984). Finally we note that a trial justice’s assignment of property will not be overturned unless it constitutes an abuse of discretion. Centazzo v. Centazzo, 509 A.2d 995, 997 (R.I. 1986).” Stanzler v. Stanzler 560 A.2d 342 (1989) Milton STANZLER v. Phyllis STANZLER. No. 88-459-A.
What is marital property in Rhode Island?
What assets are not marital property under Rhode Island divorce Law? Premarital property is not subject to the equitable division statute. Premarital property is property that was acquired by either spouse prior to the date of the marriage.
Premarital Property is not marital property
Section 15-5-16.1(b) states: “The court may not assign property or an interest in property held in the name of one of the parties if the property was held by the party prior to the marriage, but may assign income which has been derived from the property during the term of the marriage, and the court may assign the appreciation of value from the date of the marriage of property or an interest in property which was held in the name of one party prior to the marriage which increased in value as a result of the efforts of either spouse during the marriage.” (Emphasis added).
Income derived from premarital property
Income derived from premarital property during the course of the marriage is subject to the equitable distribution statute. See: Horton v. Horton, 891 A.2d 885 (R.I. 2006) Income from premarital assets can be equitably assigned by the RI Family Court even if it did not result from the efforts of the non-owner spouse. (Editor’s note: income derived from premarital property is treated differently than appreciation of premarital property! For a justice of the RI Family Court to assign income of premarital property, efforts from either spouse is not required. However, appreciation of premarital property can only be equitably assigned by a judge in Rhode Island if it resulted from the efforts of either spouse under the doctrine of “active appreciation.”)
Appreciation of premarital property
The appreciation in value of premarital property during the course of the marriage is also subject to the equitable division statute so long as the appreciation resulted from the efforts of either spouse. See: Horton v. Horton, 891 A.2d 885 (R.I. 2006) Therefore, “active appreciation” is required under Rhode Island law for appreciation of a non marital asset to be assigned.
In Sullivan V Sullivan, 249 A.3d 637 (2021) the Court determined that the justice handling the trial need not assign to the spouse some of the appreciation of a premarital pension or premarital bank account. The Court reasoned that the increase in value of the pension was “passive and not due to the efforts of either party during the marriage.” Id
Appreciation from efforts of non owner spouse?
In order for the appreciation of value of premarital property to be equitably divided, the appreciation must result from the efforts of the spouse who do did not own the asset prior to the marriage. This provision requiring that the appreciation result from the efforts of either spouse has been more strictly enforced in light of the ruling in Sullivan v Sullivan.
Distinction between interest and appreciation
It is important to note that the Rhode Island Legislature made a distinction between interest and appreciation in determining whether the other spouse must have expended any effort. The RI legislature did not require any effort of either spouse in order for interest derived from premarital property to be equitably divided by the Rhode Island Family court in a divorce. It is not required that interest earned from premarital property be derived from the efforts of either spouse.
Gift from third party
Gifts from third parties whether acquired before or during the marriage are not marital property subject to equitable division under Rhode Island Law. The income and appreciation from gifted property is not marital property. This specifically includes life insurance and distributions from trusts. Shramek v Shramek, 901 A.2d 593 (R.I. 2006)
see: Black v. Weisner, 308 A.2d 511 (R.I. 1973) (donative intent and delivery); Gervais v Gervais, 688 A.2d 1303 (R.I. 1997) (Gift tax returns are a factor but are not determinative of a gift)
Gifts among spouses
Gifts to both husband and wife are marital property subject to division by the Court. Gifts among spouses are part of the marital estate. Shramek v Shramek, 901 A.2d 593 (R.I. 2006)
See also: Ruffel V Ruffel, 900 A.2d 1178 (R.I. 2006) (Deals with premarital gifts between the parties.)
If one spouse pays for property during the marriage and then puts the property in the name of both spouses, this is a presumed gift. See: Quinn v. Quinn, 512 A.2d 848 (R.I. 1986); Shramek v Shramek, 901 A.2d 593 (R.I. 2006) But however consider: Stephenson v Stephenson, 811 A.2d 1138 (R.I. 2002) ( transfer to wife had no donative intent- for convenience purposes only)
Inherited property in Rhode Island divorce
Inherited property is not marital property. The income and appreciation of inherited property is not subject to the equitable distribution statute in a RI divorce.
Advanced degrees and professional license
An advanced degree is not a marital asset. A professional’s license such as as a lawyer’s license to practice law is not a marital asset.
Social Security
Social Security is not a marital asset. It is a government entitlement. Nonetheless, a spouse who does not remarry and had a 10 year marriage may be eligible for increased social security benefits.
Rhode Island Attorneys legal Notice per RI Rules of Professional Responsibility:
The Rhode Island Supreme Court licenses all lawyers in the general practice of law, but does not license or certify any lawyer / attorney as an expert or specialist in any field of practice.