Amongst their split, Donald Trump Jr. and soon-to-be ex-wife Vanessa found themselves in a messy marinara situation. Vanessa’s father, Charles Haydon, invested in Rao’s Specialty Foods, a business that sells the New York restaurant’s famous marinara sauce. How big of an investment? About $1 million was invested into the brand, while Haydon controlled 30% of the company. He died in 2005.
In 2017, the business was sold for around $415 million. Recently after, Vanessa announced her split from Donald Trump Jr. Her newly-inherited fortune may have created a sense of financial security for Vanessa, but what does Trump Jr. get out of it? Possibly Nothing. Raoul Felder, a New York attorney not associated with the case, says that Donald Trump Jr. “cannot touch the money”. New York is one of many states that allows for only marital property to be divided. According to Felder, “third-party gifts, or money you get from third parties directly, is not included in a marital pot. She is absolutely secure.”
What is Equitable Distribution?
Equitable distribution (ED) – dividing couples’ assets pursuant to divorce – can be stressful and time consuming. Determining what belongs to who, what to trash, and what to sell is a daunting process. ED in North Carolina is much like that of New York. There are three main steps conducted by the court when spouses are unable to divide property on their own. The first is identification. The court determines which property is marital, which was owned before marriage, inherited property, and gifts. Gifts and inheritances are considered separate property and do not get divided with the other spouse. However, gifts from one spouse to the other, are marital property.
Marcellino & Tyson’s family law associate attorney Andria Marquez states that, “It becomes difficult to differentiate between marital versus separate property when there is an asset that is mixed. For example, if one spouse owned a home before the parties were married, then the asset would typically be considered part separate (though there are exceptions to this general rule). However, if the other spouse contributed to the mortgage payments of that property or helped to make improvements on the property, then that spouse may be entitled to some portion of the equity of the home. Calculating the exact amount that the spouse contributed toward the mortgage can sometimes be difficult.”
Once the court has finalized the identification stage, the next step is valuation. To accurately value the marital portion of real property, retirement accounts, and other property, a party can hire forensic accountants who review the activity of such accounts before, during, and after the parties’ marriage and assist the spouses in tracing out the marital and separate values of such assets. A fair market value is assigned to each piece of property. Once that is determined and agreed upon, the final step, distribution, takes place. The court must distribute the property in an equitable manner.
While Marquez recognizes that dividing assets is difficult, she notes that it is a critical part of the divorce process. Making sure that a spouse considers their post-divorce life in the equitable distribution process is very important. Also, a spouse wants to ensure that he or she receives a fair amount of the marital assets built over the period of the marriage. As with the Vanessa and Donald Trump Jr. situation, the presence of a business or extensive gifts, inheritances, or separate property can complicate the ED process.”
At Marcellino & Tyson, our family law attorneys have worked hundreds of equitable distribution cases, from dealing with inheritance issues in divorce to valuation and consideration of private business interests. It’s our commitment to protect what’s yours.
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