#24023-rev & rem-DG 

2007 SD 56

IN THE SUPREME COURT 

OF THE 

STATE OF SOUTH DAKOTA 

* * * * 

LOIS F. JOHNSON, Plaintiff and Appellant, 

 v. 

LEONARD P. JOHNSON, Defendant and Appellee. 

* * * * 

APPEAL FROM THE CIRCUIT COURT OF 

THE SECOND JUDICIAL CIRCUIT 

MINNEHAHA COUNTY, SOUTH DAKOTA 

* * * * 

HONORABLE GENE PAUL KEAN 

Judge 

* * * * 

VICTORIA M. DUEHR of 

Bangs, McCullen, Butler, 

 Foye & Simmons, LLP 

Sioux Falls, South Dakota Attorneys for plaintiff 

and appellant. 

GREGORY T. BREWERS 

RICHARD A. JOHNSON of 

Strange, Farrell & Johnson 

Sioux Falls, South Dakota Attorneys for defendant 

and appellee. 

* * * * 

ARGUED MARCH 21, 2006 

 OPINION FILED 06/20/07
-1- 

#24023 

GILBERTSON, Chief Justice 

[¶1.] Lois F. Johnson appeals the property division in a judgment and 

decree of divorce from Leonard P. Johnson (Pete). We reverse and remand. 

FACTS AND PROCEDURE 

[¶2.] Lois and Pete were married on October 20, 1972 and divorced on 

November 9, 2005 after thirty-three years of marriage. Both agreed to waive all 

claims to alimony or other spousal support, and all their children are adults, so 

there are no issues of child custody, child support or visitation. The issues on 

appeal solely concern the court’s division and valuation of certain property. 

[¶3.] Lois was born on February 1, 1947, and is in good health. She was 

working at the Department of Veteran’s Affairs when she married Pete and had 

been working there for seven years before the marriage. She took a six-year leave 

of absence for the birth and early rearing of their children but returned and 

continues to work there presently. She intends to remain with the Department of 

Veteran’s Affairs for at least four more years. Lois currently earns about $45,000 a 

year with annual raises of about three percent. She was also involved with the 

farming operation, especially during her six-year leave of absence. 

[¶4.] Pete was at the time of marriage, and still is today, a self-employed 

farmer and livestock producer. He was born on February 26, 1940, and is seven 

years older than Lois. Pete has had both of his shoulders replaced due to an 

automobile accident and deterioration caused by a lifetime of work on the farm. At 

the time of the divorce, the residual effects of the automobile accident have 

apparently all but vanished; however, it was related to the trial court that Pete 
#24023 

-2- 

suffered neck and back pain and continuous headaches as a result of the accident. 

Pete was also injured from an accident on the farm when a tailgate of a farm vehicle 

hit him on the head. However, the jolt seemed to rectify some of the neck and back 

issues he was suffering from as a result of the automobile accident. 

[¶5.] The farm income has fluctuated over the last five years, but there 

appears to be no great disparity between Lois and Pete in their present day ability 

to earn an income except that Pete’s income depends upon good weather, reasonable 

expenses and a favorable market. Pete also currently receives social security 

benefits of $851.20 per month. As an employee of the Department of Veteran’s 

Affairs, Lois enrolled in the Civil Service Retirement System (CSRS), which is a 

defined benefit retirement program. By opting to participate in the CSRS, Lois 

cannot collect social security benefits. 

[¶6.] On January 9, 1997, during the marriage, Pete and Lois were involved 

in an automobile accident. Pete sustained injuries to his neck and shoulders as a 

result of the accident. They both brought suit against the tort-feasor, and the jury 

returned a verdict for nearly $900,000. The jury partitioned $106,500 for Lois’s loss 

of consortium claim and the balance for Pete’s personal injuries. Pete and Lois 

executed a post-verdict settlement stipulation, agreeing to reduce the verdict to 

approximately $800,000. This resulted in a net payment of $480,786.93 to Pete and 

Lois. With this money, they paid off the mortgage on the farm ($168,055) and 

interest on the 2000 operating loan ($3,989.28), provided gifts to their children and 

others ($28,160), invested in an Edward Jones account ($200,000) and bought cattle 

($38,000). 
#24023 

-3- 

[¶7.] As part of the divorce, Lois and Pete entered into a stipulation 

concerning the farm operation for the year 2005. Under the agreement, the 

operating loan for 2005 would be Pete’s obligation and not considered marital debt. 

In turn, Lois agreed not to claim the 2005 crop or increase in cattle as assets of the 

marriage. Thus, they agreed to use early 2005 as the point in time for final 

valuation of the marital assets. The 2004 operating loan was paid off on January 

14, 2005. 

[¶8.] Lois and Pete each hired a separate appraiser to determine the value 

of the farm assets, exclusive of the real estate. They agreed on the value of the real 

estate as $1,213,000. Lois retained Roger Peterson, a certified agricultural personal 

property appraiser, to appraise the livestock, feed and machinery. Peterson’s 

appraisal took place on December 18, 2004. Peterson collected feed samples and 

tested its quality in order to establish its value and contacted several dealers, 

referenced a farm guide book, and used his personal knowledge to appraise the 

machinery. Peterson arrived at a total value of $557,108. Pete retained Tom 

Souvignier to appraise the livestock, feed and machinery. He inspected and valued 

the property at $340,359 on March 28, 2005. 

[¶9.] The court used the valuations provided by Souvignier, despite the fact 

that his valuation did not occur until more than two months after the 2004 

operating loan was paid off. Although the court recognized that both experts were 

well-qualified, the court reasoned that Souvignier possessed a current up-to-date 

knowledge of prices given his work conducting actual sales and presiding over 

auctions on a regular basis. 
#24023 

-4- 

[¶10.] Each also hired an expert to determine the present day value of Lois’ 

CSRS benefits. Lois retained Bridget VanHove Wenande, who arrived at a value of 

$315,000, and Pete hired Eide Bailly, who calculated a present day value of 

$354,000. The difference between these opinions was directly related to the 

discount rates for the deferral and payment period. Wenande also calculated the 

present day value of Pete’s social security benefits. She used the same method as 

she did to arrive at the present day value for Lois’ CSRS benefits and used the 

$851.20 per month benefits Pete was currently receiving in social security to arrive 

at an amount of $115,000. The court acknowledged that both experts hired to figure 

the present day value of the CSRS benefits were well qualified, yet accepted the 

value presented by Pete’s expert, Eide Bailly. 

[¶11.] Lois claims Pete dissipated the marital estate by spending $3,301 on 

gifts for his girlfriend. Lois offered evidence of a ring, pendant, flowers and clothing 

purchased for the girlfriend and trips they allegedly took together. However, the 

court held Lois made no showing as to what amount of travel expenses were 

attributable to one person alone, and Pete testified that the ring purchased was for 

him, not a girlfriend. The court found sufficient evidence to attribute $567 as gifts 

for Pete’s girlfriend. 

[¶12.] The trial court used the analytical approach to divide the personal 

injury award. Using this approach, the court looked to see if the award was 

replacing some marital asset, such as awards for medical treatment, future medical 

treatment, out-of-pocket expenses and loss of future income. If so, these were 

considered replacement amounts that should be distributed as marital assets. The 
#24023 

-5- 

 

portion of the award set aside for physical injuries, pain and suffering and loss of 

consortium, however, were considered personal awards to Pete and Lois. The 

personal awards were denoted separate property and diminished the marital estate. 

[¶13.] The court concluded 50% of the verdict was for Pete, 11% for Lois and 

39% was marital. However, the court determined only $321,954 was traceable to 

the proceeds of the settlement award. The remaining amount was either 

commingled, spent, untraceable or otherwise appropriately distributed equally. 

Thus, $160,977 of the personal injury settlement was deducted from Pete’s estate as 

his separate property and $35,415 was deducted from Lois’s estate as her separate 

property. 

[¶14.] Despite Lois’ argument that Pete’s social security benefits should be 

offset against her CSRS benefits, the court decided not to offset Pete’s social 

security benefits because the present day value of such benefits had not been 

adequately proven. Instead, the court included the full value of Lois’ CSRS benefits 

without making any equitable adjustment to account for the fact that Pete receives 

and will continue to receive social security benefits. 

[¶15.] Finally, the trial court granted Lois a net estate of $506,6871 and Pete 

a net estate of $1,349,784,2 leaving a difference of $843,097. The court determined 

1. The court awarded Lois the household personal property, her vehicle, 

checking account, Edward Jones investment account, and the full value of her 

CSRS benefits, less her debt and $35,415 denoted to her from the personal 

injury award. 

2. The court granted Pete the farmland, machinery, livestock, feed, and his 

checking accounts, less his debt and $160,977 denoted to him from the 

personal injury award. 
#24023 

-6- 

 

that Pete should pay Lois $300,000 in order to balance the equitable distribution of 

the marital assets.3 After the equalizing payment, the net division was 43% to Lois 

and 57% to Pete. 

[¶16.] Lois appeals, raising five issues: 

1. Whether the trial court abused its discretion when it did 

not offset Pete’s social security benefits against Lois’ 

CSRS benefits. 

2. Whether the trial court erred when it distributed portions 

of the personal injury settlement as separate property 

instead of including the entire award in the marital 

estate. 

3. Whether the trial court’s valuations of the checking 

accounts, Lois’ CSRS, and livestock, feed and machinery 

were clearly erroneous. 

4. Whether the trial court erred when it credited Pete 

$357.00 for gifts to his girlfriend. 

5. Whether the trial court’s net property division was an 

abuse of discretion. 

STANDARD OF REVIEW 

‘The valuation of property involved in a divorce proceeding will 

not be overturned unless it is clearly erroneous.’ Priebe v. 

Priebe, 1996 SD 136, ¶8, 556 NW2d 78, 80. ‘Our standard of 

review of a trial court’s property division is that of an abuse of 

discretion.’ Grode v. Grode, 1996 SD 15, ¶6, 543 NW2d 795, 

799. ‘The term “abuse of discretion” refers to a discretion 

exercised to an end or purpose not justified by, and clearly 

against reason and evidence.’ Id. ¶6, 543 NW2d at 800. 

Fausch v. Fausch, 2005 SD 63, ¶5, 697 NW2d 748, 751. 

3. The court ordered the $300,000 be paid in annual payments of $25,000 for 

twelve years at 6% interest. 
#24023 

-7- 

ANALYSIS AND DECISION 

[¶17.] 1. Whether the trial court abused its discretion when 

it did not offset Pete’s social security benefits 

against Lois’ CSRS benefits. 

[¶18.] Lois requested that the court offset either the present day value of 

Pete’s social security benefits or her hypothetical social security benefits against her 

CSRS benefits to render an equitable distribution of the marital property. She 

concedes that Pete’s social security benefits may not directly be a part of the marital 

property division. See Mulder v. South Dakota Dep’t. of Social Services, 2004 SD 

10, ¶3 n2, 675 NW2d 212, 213 n2 (“social security benefits . . . may not be part of a 

marital property division”). However, she notes that there is no similar restriction 

for her CSRS benefits. See Midzak v. Midzak, 2005 SD 58, ¶22, 697 NW2d 733, 739 

(“retirement accounts and pensions . . . must be treated as marital assets and 

divided between the parties”). Thus, Lois requests an indirect offset to avoid the 

inequity of including the full amount of her CSRS benefits as marital property while 

Pete’s social security benefits are entirely excluded. 

[¶19.] The trial court, assuming this Court would allow an offset, determined 

that Lois presented incomplete evidence on the present day value of Pete’s social 

security benefits. It was on this basis that the trial court denied the offset. Upon 

review of the record, it appears the trial court did have sufficient evidence to 

determine the present day value of Pete’s social security benefits. Pete was already 

receiving a set monthly benefit, and Lois’ expert presented a value and the 

calculations used to arrive at that value. Thus, the only issue remaining is whether 

an offset is allowed. 
#24023 

-8- 

[¶20.] Whether social security benefits may be indirectly considered as an 

offset is a matter of first impression in South Dakota, and other states are split on 

the issue. Some courts have “concluded that an offset of Social Security benefits is 

prohibited by the anti-assignment clause of the Social Security Act and the 

Supremacy Clause of the U.S. Constitution.” Webster v. Webster, 716 NW2d 47, 55 

(Neb 2006). “Under 42 U.S.C. § 407(a) (2000), the transfer or assignment of Social 

Security benefits is forbidden and, in general, protects these benefits from 

‘execution, levy, attachment, garnishment, or other legal process.’” Id. at 54. 

Although Congress allowed an exception for collection of past-due child support or 

alimony, it excluded from that exception payment obligations arising from an 

equitable distribution of property or other division of property between former 

spouses. Id. (citing 42 USC § 659(a) and (i)(3)(B)(ii) (2000)). 

[¶21.] “The U.S. Supreme Court has not specifically addressed whether a 

state court can indirectly offset or otherwise consider the parties’ respective Social 

Security benefits in dividing marital property in a dissolution proceeding.” Id. 

However, “several state courts look to the Court’s decision in Hisquierdo v. 

Hisquierdo, 439 US 572, 99 SCt 802, 59 LEd2d 1 (1979), as instructing them that 

Social Security is not subject to an indirect adjustment through offset.” Id. (citing 

In re Marriage of James, 950 P2d 624, 628 (ColoApp 1997); Johnson v. Johnson, 726 

So2d 393, 396 (FlaApp 1999); In re Marriage of Crook, 813 NE2d 198, 202 (Ill 2004); 

In re Marriage of Boyer, 538 NW2d 293, 295 (Iowa 1995); Olson v. Olson, 445 NW2d 

1, 7 (ND 1989); Reymann v. Reymann, 919 SW2d 615, 617 (TennApp 1995); In re

Marriage of Zahm, 978 P2d 498, 502 (Wash 1999); Berthiaume v. Berthiaume, 1991 
#24023 

-9- 

WL 90839 (MinnApp 1991) (unpublished)). See also Neville v. Neville, 791 NE2d 

434, 436 (Ohio 2003); Depot v. Depot, 893 A2d 995, 1000 (Me 2006); Wolff v. Wolff, 

929 P2d 916, 921 (Nev 1996); In re Marriage of Swan, 720 P2d 747, 751 (Or 1986). 

[¶22.] In Hisquierdo, “the Supreme Court held that (1) a direct division of 

Railroad Retirement benefits violated the nonassignment provision of the Railroad 

Retirement Act; and (2) using other assets to balance or offset one spouse’s expected 

Railroad Retirement benefits was tantamount to anticipating and dividing those 

benefits in violation of the Act.” Depot, 893 A2d at 999-1000 (citing Hisquierdo, 439 

US at 583, 588-90, 99 SCt 802, 59 LEd2d 1). In that case, the Supreme Court 

analogized the Railroad Retirement Act benefits to social security benefits. 

Hisquierdo, 439 US at 575, 99 SCt at 805, 59 LEd2d 1. The Court reasoned that 

neither social security nor railroad retirement benefits are contractual. Id. 

“Congress may alter, and even eliminate, them at any time.” Id. The Railroad 

Retirement Act is also subject to an anti-assignment provision similar to the Social 

Security Act. Id. (citing 45 USC § 231m). In concluding that an offset was 

improper, the Court reasoned that an offsetting award would upset the statutory 

balance and impair economic security just as surely as would a regular deduction. 

Id. at 588, 99 SCt at 811, 59 LEd2d 1. 

[¶23.] These courts have also looked to the fact that Congress provided a 

specific limited avenue for divorced persons to obtain a share of the former spouse’s 

benefits in the Social Security Act. Webster, 716 NW2d at 55 (citing 42 USC § 

402(b)(1)(A) through (D), and (c)(1)(A) through (D) (2000)). According to these 

courts, this statutory provision portrays Congress’ intent to preempt state law 
#24023 

-10- 

property division schemes as applied to the social security benefits of a spouse upon 

divorce. In re Marriage of Swan, 720 P2d at 751-752. 

[¶24.] However, some courts allow an indirect offset. Webster, 716 NW2d at 

54 (citing Kelly v. Kelly, 9 P3d 1046, 1048 (Ariz 2000); Panetta v. Panetta, 851 A2d 

720, 728 (NJ 2004); Eickelberger v. Eickelberger, 638 NE2d 130, 135 (OhioApp 

1994); Cornbleth v. Cornbleth, 580 A2d 369, 372 (Pa 1990)). See also Harshbarger 

v. Harshbarger, 814 NE2d 105, 110 (OhioApp 2004). The Harshbarger court “offset 

. . . the actual amount of the Social Security spouse’s Social Security benefits 

accrued during the marriage against the retirement benefits of the non-Social 

Security spouse accrued during the marriage.” 814 NE2d at 110. And, the Kelly

court, utilizing the hypothetical approach, determined the present value of the nonsocial security spouse’s social security benefits he would have received had he 

participated in the system during the marriage. 9 P3d at 1048. Then, the court 

deducted this hypothetical social security calculation from the present value of the 

non-social security spouse’s CSRS pension on the date of dissolution. Id. 

[¶25.] Most courts utilize yet another, less restrictive approach. These courts 

disallow an offset but allow a general consideration of a party’s anticipated social 

security benefits in the overall scheme when making a property division. Webster, 

716 NW2d at 55 (citing In re Marriage of Morehouse, 121 P3d 264, 266-67 (ColApp 

2005); In re Marriage of Boyer, 538 NW2d at 296; In re Marriage of Brane, 908 P2d 

625, 628 (KanApp 1995); Bradbury v. Bradbury, 893 A2d 607, 609 (Me 2006); 

Mahoney v. Mahoney, 681 NE2d 852, 856 (Mass 1997); Rudden v. Rudden, 765 
#24023 

-11- 

 

SW2d 719, 720 (MoApp 1989); Neville, 791 NE2d at 437; In re Marriage of Zahm, 

978 P2d at 502). See also Depot, 893 A2d at 1002. 

[¶26.] These courts generally reason: 

‘While the anti-reassignment clause of the Social Security Act 

precludes a trial court from directly dividing social security 

income in a divorce action, a trial court may still properly 

consider a spouse’s social security income within the more 

elastic parameters of the court’s power to formulate a just and 

equitable division of the parties’ marital property.’ 

Depot, 893 A2d at 1000 (quoting In re Marriage of Zahm, 978 P2d at 502). They 

also “see a crucial distinction between: (1) adjusting property division so as to 

indirectly allow invasion of benefits; and (2) making a general adjustment in 

dividing marital property on the basis that one party, far more than the other, can 

reasonably expect to enjoy a secure retirement.” In re Marriage of Boyer, 538 NW2d 

at 296. Therefore, these courts conclude that “while a trial court may not distribute 

marital property to offset the computed value of Social Security benefits, it may 

premise an unequal distribution of property—using, for example, a 60-40 formula 

instead of 50-50—on the fact that one party is more likely to enjoy a secure 

retirement.” In re Marriage of Morehouse, 121 P3d at 267. 

[¶27.] We agree with the majority approach that social security benefits may 

be considered as a factor, among others, when dividing marital property. This 

adheres to the federal restrictions, for it is not a direct division of Pete’s social 

security.4 And, at the same time, it recognizes and compensates for the inequity of 

 (continued . . .) 

4. “A divorce court’s consideration of a spouse’s anticipated or actual Social 

Security benefit payments as a relevant factor . . . does not represent a 

transfer or assignment of ‘the right of any person to any future payment 
#24023 

-12- 

________________________ 

(. . . continued) 

including all of Lois’s CSRS benefits in the marital estate while Pete’s social 

security benefits are entirely excluded. It also comports with the general rule that 

the trial court is not tied to any mathematical formula when structuring the 

division of property, and neither party is entitled to a 50-50 division of the marital 

estate. Thus, a court may premise an unequal distribution of marital property on 

the fact that one party is likely to receive or, in this case, is receiving social security 

benefits. 

[¶28.] 2. Whether the trial court erred when it distributed 

 portions of the personal injury settlement as 

 separate property instead of including the entire 

 award in the marital estate. 

[¶29.] Lois argues that the full value of the personal injury proceeds should 

have been included in the marital estate because the proceeds have all been 

commingled. She alleges the trial court abused its discretion when it denoted 

$35,415 of the proceeds as Lois’ separate property and $160,977 as Pete’s. 

[¶30.] There are four South Dakota decisions which discuss personal injury 

awards in the context of divorce proceedings. One such case held that inclusion of a 

personal injury settlement award in the marital estate was not error. Wipf v. Wipf, 

273 NW2d 124, 125 (SD 1978). In Wipf, both parties were injured in an accident 

that occurred during the course of the marriage, and the trial court ordered both 

parties to endorse the settlement check, which represented payment of their 

under the portion of the Social Security Act that governs old-age, survivors, 

and disability insurance benefits’ in violation of the Social Security Act’s antiassignment provision.” Depot, 893 A2d at 1001 (quoting 42 USCA § 407(a)).
#24023 

-13- 

respective claims. Fink v. Fink, 296 NW2d 916, 918 (SD 1980). However, this 

Court concluded in Fink, that settlement proceeds were not marital assets subject 

to distribution when the cause of action for personal injuries arose prior to the 

marriage and the proceeds were received nearly a year after commencement of the 

divorce action. Id. at 919. 

[¶31.] Also, in Henrichs v. Henrichs, this Court, relying on Wipf and Fink, 

pronounced that “settlement proceeds are marital property subject to distribution.” 

426 NW2d 569, 571 (SD 1988). But, in Kappenmann v. Kappenmann, this Court set 

aside a pending personal injury claim to the wife. 479 NW2d 520, 525 (SD 1992). 

All four cases were affirmed by this Court so our deferential standard of review 

obviously came into play. Moreover, that discretion may be exercised because there 

may be a distinction between when the injuries arose during the course of the 

marriage and the compensation was received during that period and otherwise. 

[¶32.] In this case, the trial court used the analytical approach presented by 

the Nebraska Supreme Court to divide the personal injury settlement proceeds. 

Parde v. Parde, 602 NW2d 657, 662 (Neb 1999). The Parde Court explained that 

there are generally two approaches utilized to decide the extent to which an injured 

party’s personal injury award should be included in the marital estate—the 

analytical approach and the mechanical approach. Id. “In the analytical approach, 

courts analyze the nature and underlying reasons for the compensation.” Id. “Only 

those portions of a personal injury award that represent compensation for past 

wages, medical expenses, and other items which diminish the marital estate are 

included within the marital estate.” Id. Compensation for purely personal losses, 
#24023 

-14- 

such as pain, suffering, disfigurement, disability, or loss of post-divorce earning 

capacity, are not included in the marital estate. Id. at 663. Meanwhile, “under the 

mechanical approach, all the moneys realized from a personal injury action are 

placed in the marital estate.” Id. at 662. 

[¶33.] According to Parde, only a minority of courts apply the mechanical 

approach. Id. at 663. “These courts note that personal injury awards are not neatly 

categorized under the traditional definitions of separate property and therefore hold 

that personal injury awards are entirely marital property.” Id. The Nebraska 

Supreme Court decided the analytical approach was more consistent with the basic 

rule that the marital estate should include only the property created by the marital 

partnership and adopted that approach. The trial court adopted this approach as 

well and decided the portion of the jury verdict for medical treatment, future 

medical treatment, out-of-pocket expenses and loss of future income were all 

replacement amounts that should be considered marital assets. On the other hand, 

the portion for physical injuries, pain and suffering and loss of consortium were 

deemed personal awards and not included in the marital estate. 

[¶34.] We agree with the reasoning in Parde, and conclude that the analytical 

approach is appropriate in deciding the extent to which a personal injury award 

should be included in the marital estate. Like the Parde Court, we add “that the 

burden of proof to show the property is nonmarital remains with the person making 

the claim.” Parde, 602 NW2d at 663. Also, this approach is limited in application to 

cases where the jury returned a partitioned verdict. In cases where a general 

verdict is issued, this approach cannot be utilized. Thus, we affirm the trial court’s 
#24023 

-15- 

use of the analytical approach and the court’s distribution of the personal injury 

proceeds in this case. 

[¶35.] 3. Whether the trial court’s valuations of the checking 

accounts, Lois’ CSRS, and livestock, feed and 

machinery were clearly erroneous. 

[¶36.] Lois claims the valuation date should have been January 14, 2005 for 

all assets, for this was when the 2004 operating loan was paid off. She contends 

this is consistent with the parties’ agreement that Lois would not be responsible for 

any of the 2005 operating loan or entitled to any of the cattle or crops acquired in 

2005. Thus, Lois maintains that her December 18, 2004, valuation of the livestock, 

feed and machinery should have been used by the trial court, because her appraisal 

was completed closer to the payoff date of the 2004 operating loan. She claims the 

trial court erred when it used Pete’s valuation conducted on March 28, 2005, nearly 

two and a half months after the operating loan was paid off. She also urges the 

Court to adopt either her valuation of her CSRS benefits or a value between the two 

provided by the parties. Finally, Lois alleges that the trial court erred when it 

valued Lois’ checking and savings accounts near the January 2005 date but used a 

date closer to trial for Pete’s account. 

[¶37.] “On review of a property division, this court will not attempt to place 

valuations on the assets because that is a task for the trial court as the trier of fact.” 

Geraets v. Geraets, 1996 SD 119, ¶7, 554 NW2d 198, 200. “The only time this court 

interferes with the valuations determined by the trial court is when it has made a 

clearly erroneous valuation finding.” Id. Absent special circumstances, the date of 

the granting of the divorce is the proper time for the determination of the value of 
#24023 

-16- 

the estate for purposes of a property division. Id. ¶8. For instance, this Court found 

“no error by the trial court in valuing the marital estate according to the time of its 

receipt of valuation evidence as opposed to the time of its entry of the divorce 

decree.” Id. ¶10, 554 NW2d at 201. “We do not require exactitude in the trial 

court’s valuation of assets; it is only necessary that the value lie within a reasonable 

range of figures.” DeVries v. DeVries, 519 NW2d 73, 75 (SD 1994). Also, a trial 

court is not required to accept either party’s proposed valuation, but the value must 

be within the range of evidence presented to the court. Id. at 76. 

[¶38.] In this case, the trial court used various dates of valuation. For 

instance, the trial court used the January 31, 2005, value of Lois’ checking and 

savings accounts but used the August 23, 2005, value of Pete’s accounts. Lois 

presented evidence that the value of Pete’s checking account on January 14, 2005, 

was $21,437.99 and on February 18, 2005, it was $4,799.24. Pete, however, offered 

a value of $5,725 as of August 23, 2005 for his account, and the trial court accepted 

that value. The trial court also accepted the appraisal that took place two and a 

half months after the operating loan was paid off, despite the parties’ agreement 

that Lois would not be responsible for any debts or entitled to any profits after that 

time. 

[¶39.] Because there is no apparent reason for the trial court using different 

valuation dates, we remand for the court to determine the value of both Lois’ and 

Pete’s accounts using the same valuation date. The value of the livestock, feed and 

machinery should also be reconsidered to ensure the parties’ agreement concerning 

the operating loan is fulfilled. The court should utilize the value of these assets at 
#24023 

-17- 

the time closest to the time the operating loan was paid off. On the other hand, the 

trial court did not error in valuing the CSRS benefits using the value presented by 

Pete’s expert. The only difference noted between the valuations was the discount 

rate, which is subjectively used and commonly fluctuates. 

[¶40.] 4. Whether the trial court erred when it credited Pete 

$357 for gifts to his girlfriend. 

[¶41.] Lois claims Pete dissipated the marital estate by spending $3,301 on 

gifts for his girlfriend. The trial court held otherwise. The court concluded that 

Pete spent only $567 on gifts for his girlfriend and credited that amount. Lois 

contends that this conclusion was clearly erroneous. Once again, “we do not 

require exactitude in the trial court’s valuation of assets; it is only necessary that 

the value lie within a reasonable range of figures.” DeVries, 519 NW2d at 75. Also, 

a trial court is not required to accept either party’s proposed valuation. Id. at 76. 

In this case, the trial court reviewed the evidence and testimony of each of the 

parties and decided the evidence supported only a $567 credit for gifts spent on 

Pete’s girlfriend. Thus, we find the trial court’s valuation is supported by the 

evidence, within a reasonable range of figures and not clearly erroneous. 

[¶42.] 5. Whether the trial court’s net property division was an 

abuse of discretion.

[¶43.] Lois argues that the trial court’s property division awarding a net 

estate of $1,349,784 to Pete and $506,687 to Lois with a $300,000 cash equalizing 

payment awarded to Lois was an abuse of discretion. Her assertion is based upon 

her award of only 43% of the marital estate and the trial court’s inclusion of 2005 

debt in the property division, which the parties agreed would not be Lois’ 
#24023 

-18- 

responsibility. Lois also claims that the court doubled her $3,460 tax refund by 

twice allocating the amount to Lois—once in her checking account and again in the 

court’s division of the tax refund. 

[¶44.] “When a trial court grants a divorce, SDCL 25-4-44 allows the court to 

equitably divide the marital estate regardless of the ownership of the property.” 

Novak v. Novak, 2006 SD 34, ¶4, 713 NW2d 551, 552. This Court has identified 

seven factors to consider when dividing marital property, including: 

(1) the duration of the marriage; (2) the value of the property 

owned by the parties; (3) the ages of the parties; (4) the health of 

the parties; (5) the competency of the parties to earn a living; (6) 

the contribution of each party to the accumulation of the 

property; and (7) the income producing capacity of the parties’ 

assets. 

Id. A trial court, however, is not bound by any mathematical formula. Grode, 1996 

SD 15, ¶9, 543 NW2d at 800. 

[¶45.] The court considered evidence relating to all of the seven factors. The 

marriage between the parties was of a significant length of thirty-three years. 

When Lois and Pete were married, they had few assets, but throughout the 

marriage they accumulated assets approaching two million dollars in value. Lois is 

fifty-eight and Pete is sixty-five years old, and although Lois’ health is good, Pete’s 

health is not as good. Pete has had both shoulders replaced and suffered neck and 

back pain and continuous headaches as a result of the automobile accident. 

[¶46.] There is no great disparity in present day ability to earn income by 

either, although Pete’s income depends upon good weather, reasonable expenses 

and a favorable market. Also, Pete has had to hire work to be done on the farm due 

to his condition. However, he has not had to reduce the overall size of his operation 
#24023 

-19- 

 

and has no plans for doing so or for leaving the farm. Lois is still employed with the 

Department of Veteran’s Affairs and plans on remaining there for at least four more 

years. She earns about $45,000 a year with annual raises of about three percent. 

[¶47.] Furthermore, the court acknowledged Lois’ contribution to the farm in 

the early years of the marriage, but also noted the decline in assistance since 

returning to work at the Department of Veteran’s Affairs. The court also considered 

the income producing capabilities of the marital assets, including the farm, 

investments, money market fund and cattle; however, the court noted that this 

factor diminishes in importance when one of the parties has full-time employment. 

[¶48.] After a thorough consideration of these factors and distribution of the 

property, the court ordered Pete to make a cash payment to Lois in order to balance 

the equitable distribution of the marital assets. The court noted that this would 

recognize the length of the marriage, acknowledge Lois’ contributions to the farm, 

provide her with assets so that she has a balanced earning capacity equivalent to 

Pete, and address their respective ages and health. 

[¶49.] Thus, it is clear from the record that the court properly considered all 

of the relevant factors in its property division. However, Pete acknowledged during 

trial that certain expenses should not be included as marital debt as they were 

expenses for 2005, which, by agreement between the parties, were not marital.5 

The court nevertheless included these amounts as marital debt. On remand, the 

5. Pete testified that the pasture expenses ($4,104) and pasture rent ($6,992) 

were expenses for 2005, and that the cattle expenses/vet and hired help 

($7,866) were for both 2004 and 2005. However, all of these debts were 

deducted from Pete’s estate in the net property division. 
#24023 

-20- 

court should uphold the parties’ agreement and ensure that this debt is not included 

in the property division. The court should also reconsider whether Lois’ tax refund 

was included in her estate twice, thus erroneously increasing her estate by $3,460. 

Also on remand, the court should reconsider the net property division and make any 

necessary adjustments consistent with the other holdings in this opinion, including 

a consideration that Pete is and will continue receiving social security benefits. 

[¶50.] Each party shall be responsible for their own appellate attorney fees. 

[¶51.] Reversed and remanded. 

[¶52.] SABERS, KONENKAMP, ZINTER, and MEIERHENRY, Justices, 

concur.