Facebook Icon Make Sure All Assets Are Considered In A Dissolution - Reape-Rickett
Make Sure All Assets Are Considered In A Dissolution

Make Sure All Assets Are Considered In A Dissolution

Category:

In a recent case, Marriage of Moore, an often overlooked asset, accrued vacation pay, was the issue and whether or not this accrued vacation pay was a community property asset. The parties were married for 27 years and Husband was a police officer. Quite commonly, government employees will accrue many hours of employee benefit time and one such asset is vacation pay. In this case, Husband had accrued 480 hours of accrued vacation time worth approximately $18,000.

The trial court ruled that the vacation pay was not a community property asset because it could not be valued and divided. Per the employment restrictions, the vacation pay could only be cashed in at time of retirement. Wife, of course, appealed this ruling and the appellate court ruled in her favor. The court of appeal reviewed prior cases wherein courts have found that vacation pay was not a gift a gratuity but additional wages for services performed and, thus, a form of deferred compensation. As a form of deferred compensation, it represents an asset or property interest to the extent that this asset or property interest was acquired during marriage it is community property. Thus, what is left is to simply calculate the value of that asset and divide it. Thus, the court took the hours of accrued vacation time multiplied by the hourly rate and divided by two and Wife was awarded her one-half share of the accrued vacation time.

 

What is also interesting to note in this case is whether or not this asset, accrued vacation pay, was disclosed to Wife. In dissolution actions, the courts require the parties to disclose to the other all assets and debts and this disclosure is usually and prescribed court-approved forms. However, these forms ask for the typical common sense assets and debts, i.e., house, cars, furniture and, thus, sometimes the parties do not even know that they have such a property right, and certainly the non-employee spouse knows even less about such an asset and whether or not they have an interest therein. Therefore, quite commonly, these assets are not disclosed on typical court-required forms. In fact, in this case, the court noted that Husband should not be sanctioned (pay money to Wife) for not disclosing the accrued vacation pay because he did disclose the vacation pay by attaching a pay stub during the litigation. Take heed, great care should be taken to make sure all documents are reviewed.

RRL Up Icon