The New Hampshire Supreme Court was asked, (Martel and Martel, March, 2008) to determine whether poor investment decisions made during the marriage by one spouse could result in an uneven property division in a subsequent divorce.
In Martel, the parties were married in 1985 and twenty years later the wife filed for divorce. The trial court granted a divorce and ordered an unequal division of property in favor of the wife. The trial court based its unequal property division, in part, on the fact that during approximately five years during the marriage, the husband lost over one million dollars in a serious of risky investments. The trial court found “the husband’s actions in stock trading cost the loss of [ ] family assets”.
On appeal, the Supreme Court overturned in part the trial’s court decision . The Court held that when dividing marital assets, the trial court can consider “the actions of either party during the marriage which contributed to the growth or diminution in value of property owned by either or both of them”. The Court went on to explain that merely because one party lost money during the marriage is not, in itself, sufficient to warrant an unequal property division. The trial court must also consider the nature of the conduct which diminished the asset, the other spouse’s knowledge of the conduct and whether the conduct diminished the total marital assets to such an extent that the other spouse is unable to live a similar lifestyle following the divorce.
In Martel, the Supreme Court held that the evidence before the trial court indicated that the husband had used his own money to make the initial deposits into the investment fund. The wife was aware that the husband was investing in the stock market and that he had managed the account daily. Further, the parties had other significant marital assets beside the investment fund, and the losses they incurred in the stock market allowed them to claim tax losses which contributed towards a tax credit of over one hundred thousand dollars. Given this evidence, the Supreme Court ordered the trial court to re-examine its finding that an unequal property division in the case was warranted.
Andrew J. Piela is a Director at Hamblett & Kerrigan, P.A. Mr. Piela concentrates his practice in civil litigation, family law, probate and land use litigation. You can reach Attorney Piela by e-mail at [email protected].