In a recent case of Martel and Martel (decided March 21, 2008) the New Hampshire Supreme Court was asked to determine whether poor investment decisions made during the marriage by one of the spouses could result in an uneven property division in a subsequent divorce.

In Martel , the parties were married in November of 1985. Twenty years later, the wife filed for divorce. The trial court granted a decree of divorce and ordered an unequal division of property in favor of the wife. The trial court based its unequal property division, in part, because for approximately five years during the marriage, the husband lost over one million dollars in a serious of risky investments. The trial court found “the husband's actions in stock trading cost the loss of [ ] family assets”.

On appeal, the Supreme Court overturned the trial's court decision in part. The Supreme Court held that in dividing marital assets, the trial court can consider “the actions of either party during the marriage which contributed to the growth or diminution in value of property owned by either or both of them”. The Supreme Court initially rejected the husband's argument that this factor requires a finding that a party intentionally damaged the property or lost money.

However, the Supreme Court went on to explain that merely because one party lost money during the marriage is not, in it of itself, sufficient to warrant an unequal property division. Instead, the trial court must consider, amongst other things, the conduct which contributed to the growth in value of the property, the nature of the conduct which diminished the asset, the other spouse's knowledge of the conduct, and whether the conduct diminished the total marital assets to such an extent that the other spouse is unable to live a similar lifestyle following the divorce.

In Martel , the Supreme Court held that the evidence before the trial court indicated that the husband used his own money to make the initial deposits into the investment fund. The wife was aware that the husband was investing in the stock market and managed the account daily. Further, the parties had other significant marital assets beside the investment fund, and the losses they incurred in the stock market allowed them to claim tax losses which contributed towards a tax credit of over one hundred thousand dollars. Given this evidence, the Supreme Court ordered the trial court to re-examine its finding that an unequal property division in the case was warranted.

Andrew J. Piela is an associate attorney at Hamblett & Kerrigan, P.A. His legal practice includes civil litigation, family law, land use litigation and probate. You can reach Attorney Piela by e-mail at: apiela@hamker.com

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