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By: Divani Nadaraja
Divorce can be a very challenging process that inevitably takes a toll on the people and families involved. During this process, it can be easy to overlook various assets and possessions you may have accumulated throughout your marriage that you may not have considered dividing. In your initial consultation, you and your attorney will likely discuss some of the more obvious marital assets and liabilities such as bank accounts, retirement accounts, houses, cars, furniture, personal property, and credit card debts. However, there are a whole host of other, less conventional, categories of items that you may want to consider such as frequent flyer miles and reward points, pets, digital and print photographs, gym and club memberships, burial plots, stem cell and cord blood storage, and embryos.
Few cases provide guidance on how these unconventional assets are treated in court. The general rules of equitable distribution suggest that if an asset was accumulated during the marriage and can appropriately be valued, then the court should be able to divide it. For example, frequent flyer miles and other such reward points are often fringe benefits of credit cards. If marital funds were used to pay these credit cards thereby accumulating the miles or reward points, then it can be argued that the miles or reward points are also marital and should be divided between spouses.
Valuation of frequent flyer miles and reward points can be tricky. The easiest way to handle these benefits is to divide and transfer the actual points into the receiving spouse’s name. This represents the cleanest break and allows each party full control over his or her own benefits. However, some reward program rules prohibit the transfer of miles or points. In these circumstances, one option is for one spouse to hold the miles or points as a constructive trustee for the other spouse to use as he or she desires. This option requires continued cooperation and communication between former spouses and may not be ideal in certain circumstances.
Alternatively, one spouse can buy out the other spouse’s interest in the miles or points for a monetary sum. This option is the most difficult as it requires the parties to value the benefits. Presently, there is no standard method for valuing these types of benefits. However, a savvy and creative attorney can assist in this process. There are also some online sources that can provide guidance on valuation of points.
Like frequent flyer miles and reward points, there are other properties you may want to address in your divorce. Who will get to keep the family dog? What about the hard drive containing all of the digital photographs of the children? What will you do with the embryos that were frozen a few years ago? Or, who will pay for the cost to store stem cell cord blood? Because these items are far less litigated in court, there is very little insight into how a judge may rule in a given case. Therefore, relying on a judge to make a decision over these sentimental items is not always a good idea. It is far better to reach an agreement when dividing these types of assets.
If your divorce matter involves some of these unique property issues, call the attorneys at ShounBach at 703-222-3333.