In re: Marriage of KelpeAnnotate this Case
Lisa and Nicolas Kelpe married in 1997 and separated in 2010. The marriage was dissolved in 2013. Nicholas was a senior manager with Ernst & Young and accrued benefits under a qualified defined benefit retirement plan. In 2012, Nicholas became an equity partnership, which required a $150,000 capital contribution from his post-separation property. He then received profit distributions instead of a salary and participated in the Top-Hat deferred compensation retirement plan, which was not available to non-partner employees. Nicholas suffered a heart attack in 2014 and resigned before vesting in the Plan. Based on 20 years of service with the firm, 13 of which were during the marriage, Nicholas received a lump-sum payment of $928,243.
The court of appeal affirmed that the lump-sum payment was Nicholas’s separate property, rejecting an argument that his right to receive the benefit accrued during the marriage by virtue of the years of service needed to qualify for the payout, even though he was not then a partner and therefore not eligible for the benefit. The payment was an additional benefit Nicholas acquired when he became a partner, after the parties’ separation. Nicholas was not equitably estopped from claiming the Top-Hat payout as separate property despite a letter expressing willingness to treat the asset as having a community component in order to reduce his tax liability and potentially his spousal support obligation.