BILL NUMBER:  S2973

 TITLE OF BILL :
An act to amend the domestic relations law, in relation to the
definition of marital property


 PURPOSE OR GENERAL IDEA OF BILL :
To include in marital property subject to equitable distribution upon
dissolution of the marriage all property transferred or encumbered in
contemplation of a matrimonial action without a fair consideration.

 SUMMARY OF SPECIFIC PROVISIONS :
Domestic Relations Law Sec. 236 B 1 c.  is amended to expressly
include in the definition of marital property any property transferred
or encumbered in contemplation of divorce without a fair
consideration. Any property transferred or encumbered within two years
of the commencement of a matrimonial action is presumed to be in
contemplation of a matrimonial action, if it is made without fair
consideration.

 EFFECTS OF PRESENT LAW WHICH THIS BILL WOULD ALTER :
Present law does not include transfers not for value in marital
property. The only reference to transfers within two years of the
commencement of a matrimonial action is that a patty must disclose all
transfers not in the ordinary course of business pursuant to domestic
              

relations law sec. 236 B 4.

 JUSTIFICATION :
Under current law, it is possible for one spouse to dissipate marital
assets in contemplation of a matrimonial action, thereby preventing
the other spouse from receiving an equitable share of the marital
property. Clearly, this was the situation in JOLIS V.  JOLIS. 111
Misc.2d 311, where the wife was denied a share in property in Arizona
purchased by the husband shortly before the commencement of the
matrimonial action and placed by him in the name of a paramour. The
problem of such transfers is analogous to the situations which existed
prior to 1966 in the spouse's right to elect against the will of the
other spouse under the estates law. Prior to 1966, the right of
election was restricted to those assets which passed under a
decedent's will.  A decedent, therefore, could defeat a spouse's right
of election by transferring property while living, resulting in no, or
a diminished estate. Similarly, by transferring assets prior to or
after the commencement of a matrimonial action, without adequate
consideration, and other than in the regular course of business,
marital property could be diminished. The post 1966 right of election
(EPTL sec.  5-1.1) expands the definition of "net estate" to include
testamentaty substitutes including: gifts in contemplation of death;
joint bank accounts; Totten trust; property held in joint tenancy; and
property held in tenancy by the entirety. This expansion of the right
of election increases the assets which would be part of the decedent's
estate against which the surviving spouse may exercise the right of
election. Thus, there are precedents in New York for the recapture of
transferred property. Clearly, one spouse should not be permitted to
defeat an equitable distribution by fraudulently transferring marital
assets prior to or after the commencement of a matrimonial action. The
outcome in the JOLIS case should not be repeated.

 PRIOR LEGISLATIVE HISTORY :
 New Bill.

 FISCAL IMPLICATIONS FOR ST ATE AND LOCAL GOVERNMENTS :
None.

 EFFECTIVE DATE :
This act shall take effect immediately and shall apply to any action
or proceeding pending on or commenced after such date.