Non-Titled Spouse, Enhanced Earnings and Substantial Contribution

I have previously written about several issues related to distribution of enhanced earnings during the equitable distribution portion of the divorce action here, here, here and here.  One of the critical issues facing a divorce lawyer, seeking seeking equitable distribution of a portion of such earnings for his/her client, is the burden of proof with respect to the non-titled spouse’s contribution to enhanced earning capacity.  The non-titled spouse seeking a distributive share of enhanced earnings must demonstrate that he/she made a substantial contribution to the titled party’s acquisition of that marital asset.

In Kriftcher v. Kriftcher, 59 A.D.3d 392 (2nd Dept. 2009,) the trial court awarded the plaintiff-wife $828,699.20 as her 40% share of the husband’s enhanced earning capacity, an attorney’s fee of $30,000, declined to award her maintenance, awarded her $1,229.71 per week in child support, and failed to award her equitable distribution of the husband’s bonus for the calendar year 2005, which the husband received in 2006.  The Appellate Division found that trial court correctly concluded that the enhanced earnings resulting from the law degree and license obtained by the husband during the marriage were marital property subject to equitable distribution.  Nevertheless, it is incumbent upon the non-titled party seeking a distributive share of such assets to demonstrate that they made a substantial contribution to the titled party’s acquisition of that marital asset, and where only modest contributions are made by the non-titled spouse toward the other spouse’s attainment of a degree or professional license, and the attainment is more directly the result of the titled spouse’s own ability, tenacity, perseverance and hard work, it is appropriate for courts to limit the distributed amount of that enhanced earning capacity.  Here, the wife’s minimal contributions to the husband’s obtaining of his degree and license entitled her to a share of only 10% in the enhanced earnings that have resulted.

In determining the appropriate amount and duration of maintenance, the court is required to consider, among other factors, the standard of living of the parties during the marriage and the present and future earning capacity of both parties.  Although the wife earned a teaching license during the course of the marriage, she was, at present, primarily a homemaker, who worked only part-time as a substitute teacher earning approximately $10,000 per year.  In sharp contrast, the husband was an attorney making approximately $500,000 per year. It held that a maintenance award of $1,000 per week for 10 years was appropriate.

The above decision is a good illustration of the recent trend where the non-titled spouse has to present evidence of his/her contribution toward creation of the other spouse’s enhanced earning capacity.  When handling such situations, divorce attorney would do well to learn everything there is to know regarding non-titled spouse’s involvement in the titled spouse’s efforts to obtain a license or degree that ultimately resulted in enhanced earning capacity.

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