Can a judge order that a retirement account be divided equally between the parties as of the date of their divorce if one party made contributions to that account after the parties separated but before the date of divorce?

This issue was examined by the Appeals Court in the recent case, Hoy v. Hoy. In that case, the wife was the primary wage earner during the parties’ long-term marriage and the trial judge in the divorce found that the husband was in need of alimony. However, because the wife’s income was substantially reduced by the time of the trial, the judge did not order her to pay alimony. Instead, the judge noted that the issue of alimony could be brought back before the Court and modified at a later date and ordered the wife to provide the husband with notice if her income increased by more than 5%. Additionally. the judge awarded the husband slightly more than half of the marital assets, including half of the wife’s retirement accounts accrued over length of the marriage and more than half of the proceeds of the sale of the marital home.

The wife appealed, contending that the trial judge abused her discretion with regards to the asset division by determining that the length of the marriage for the purposes of dividing the retirement assets ended on the date of divorce rather than on the date of separation, which was nearly 7 years earlier. The wife argued that the husband should not share in any increase in value of her retirement assets after their separation on the grounds that he made no contributions to the marriage after they separated and that any increase in the value of the retirement assets was due solely to the wife’s efforts.

The Appellate Court examined each of the wife’s two retirement accounts separately in coming to its determination. The wife had stopped contributing to her first retirement account in 2006, prior to the parties’ separation. Therefore, although this first account increased in value substantially by the time of the divorce trial, the Court found this appreciation was not due to any post-separation contributions of the wife or her employer. As such, the Court found there was no error in ordering that this first account be divided equally between the parties.

The wife had, however, made post-separation contributions to her second retirement account, which was worth approximately $20,000 at the time of the divorce trial. The Court examined the division of this second retirement account in the context of the total asset division, including the unequal division of the proceeds of the sale of the marital home, to determine whether the trial judge’s determinations regarding alimony and asset division were plainly wrong and excessive.

The Court found that the rationale for the trial judges’ asset division was obvious – the husband was in need of alimony and the wife had a greater earning capacity than the husband, although she did not have the current ability to pay at the time of the trial. As such, rather than award alimony, the judge divided the retirement assets evenly and awarded the husband $11,619 more of the proceeds of the sale of the marital home than she awarded the wife. The Court found that, because the division of assets was not plainly wrong or excessive, there was no abuse of discretion and affirmed the judgment.

The takeaway from this decision is that judges have a lot of latitude in crafting a fair asset division in a divorce.


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