Opinion ID: 1651797
Heading Depth: 2
Heading Rank: 1

Heading: whether the chancellor erred in classifying as marital property judy's 2005 employment severance agreement and bridge ira account.

Text: ¶ 13. Judy argues that her 2005 Employment Severance Agreement in the amount of $267,707 (after withholding) and her bridge IRA account in the amount of $52,448, were erroneously classified as marital property, because those funds were distributed to her after the separation. James argues that the chancellor applied the law correctly, as the assets were distributed prior to the divorce, and no separate-maintenance or temporary-support orders were issued in this case. ¶ 14. The guidelines that chancellors must employ in equitable distribution are as follows: (1) classify the parties' assets as marital or separate, (2) value those assets, and (3) divide the marital assets equitably. Ferguson v. Ferguson, 639 So.2d 921, 928 (Miss.1994). This Court has defined marital property as any and all property acquired or accumulated during the marriage. Assets so acquired or accumulated during the course of the marriage are marital assets and are subject to an equitable distribution by the chancellor. Hemsley v. Hemsley, 639 So.2d 909, 915 (Miss.1994). ¶ 15. Generally, for the purposes of classifying marital property, the marriage runs from the date of marriage until the final judgment of divorce. This Court has carved out an exception, however, where there exists an order for separate maintenance. See Godwin v. Godwin, 758 So.2d 384 (Miss.1999). Assets acquired after an order for separate maintenance should be considered the separate property of the parties, absent a showing of either (1) contribution to the acquisition of the asset by the other spouse as contemplated in our decisions in Ferguson v. Ferguson, 639 So.2d 921, 928-29 (Miss.1994), and Magee v. Magee, 661 So.2d 1117, 1123 (Miss.1995) or, (2) acquisition of the asset through the use of marital property. [footnote omitted.] Id. at 386. The Court of Appeals has recognized that the entry of a temporary-support order should also serve as a demarcation or end date for the tallying of marital assets. See Pittman v. Pittman, 791 So.2d 857, 864 (Miss.Ct.App.2001). ¶ 16. The second prong of Judy's argument is that her severance and IRA were compensation she would have earned had she remained employed with the shipyard; therefore, they were payment for future earnings and benefit, not consideration for the years of past service that overlapped with the years she was married. Judy cites Berry v. Berry, 898 A.2d 1100, 1105-1106 (Pa.Super.2006), for the premise that [t]he majority of states that have considered the issue have concluded that `the touchstone of the classification is whether the severance pay was intended to compensate the employee for efforts made during the marriage or to replace post-separation earnings.' She further cites Prescott v. Prescott, 736 So.2d 409 (Miss. Ct.App.1999), a case in which the Mississippi Court of Appeals considered how to classify a husband's severance pay. ¶ 17. In Prescott, the wife argued that her husband's entire severance package was marital property, given that the severance was paid out to him during the marriage. Id. at 412. The Court of Appeals found that, since Mr. Prescott had been employed with his company for almost thirty-two years before the parties had married, most of the benefits to which Mr. Prescott had been entitled had accrued before the marriage. Id. Thus, the court found that the chancellor did not err in allocating to Mrs. Prescott only a portion of the amount of severance that Mr. Prescott had earned during the seven years of marriage. Id. ¶ 18. Conversely, James points out that in Prescott, the Court of Appeals held that a severance package was, in fact, considered to be marital property. James further cites Striebeck v. Striebeck, 5 So.3d 450 (Miss.Ct.App.2008), in support of his argument that assets accrued during the marriage are part of the marital estate. In Striebeck, the Court of Appeals considered whether attorney's fees earned by the husband after the parties had separated, but before they had divorced, could be considered marital property. Id. at 454. In holding that the attorney's fees were part of the marital estate, the Court of Appeals noted that the record contained no indication of a property division or temporary-support order entered in the case prior to the distribution of the fees to Mr. Striebeck. Id. Moreover, the court found it significant that Mrs. Striebeck had contributed to her husband's law practice. Id. Notwithstanding Judy's argument that the severance package and IRA were distributed for the purposes of providing her with future earnings, not for the purpose of compensating her for past service, Judy and James were married when the severance payout began in 2005, and they remained married until October 2007, after the severance pay was exhausted. The record in this case reflects no temporary-support order or order for separate maintenance. Accordingly, we hold that the chancellor did not err in finding that both the severance and the IRA benefits received by Judy could be considered marital property, given that they were distributed to Judy two years before the divorce.