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Divorce & Double Dipping is Alive and Well

In a recent divorce decision from the NY 2nd Department in Palydowycz v. Palydowycz (NYLJ, April 14) , the Court has ruled that a husband's medical practice's income can serve as BOTH a basis for establishing maintenance to the wife as well as a basis for establishing a value for the practice itself.

In Palydowycz, the Second Department unequivocally and unanimously held that the excess earnings of the husband's medical practice could be capitalized to calculate a value for his practice for equitable distribution purposes, and that same income stream could also be properly considered in computing the payor spouse's maintenance obligation. The panel went on to state that its contradictory 2010 holding on the exact same issue in Rodriguez v. Rodriguez (70 AD3d 799) is no longer to be followed.

The Court decision is one which cause future business owner's maintenance payments to increase and will be a cause of joy for future maintenance recipients further highlighting the need for prenuptial/postnuptial agreements to protect the rights of the parties involved and reach fair and equitable settlements in the event of a divorce.

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