One of the more complex and controversial issues in the equitable distribution arena is the allocation of marital and separate property components of assets that contain both categories of property. A disability benefit payment, sometimes derived from employer-sponsored plans, sometimes from private insurance policies, and sometimes from exceptional sources, is one such hybrid asset. Recently, the Appellate Division, Second Department, in an opinion by Associate Justice Robert A. Spolzino, in Howe v. Howe,1 addressed two important issues pertaining to disability benefits: (1) the burden of proof when allocating between deferred compensation and disability payments derived from an employer-sponsored plan; and (2) the classification of the economic elements of an award from the September 11th Victim Compensation Fund.
Hybrid Pension Benefits
It is well-established that to the extent a pension interest represents deferred compensation for services rendered during the marriage and before commencement of the action, the interest represents distributable marital property.2 It is also clear that compensation for personal injury represents separate property.3
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