Opinion ID: 2516485
Heading Depth: 3
Heading Rank: 1

Heading: It Was Error to Find the Inheritance Was Converted to Marital Property.

Text: In Cox v. Cox [9] we listed some of the circumstances which can lead to a transmutation of separate property into marital property. These included (1) the use of property as the parties' personal residence, and (2) the ongoing maintenance and managing of the property by both parties, as well as (3) placing the title of the property in joint ownership and (4) using the credit of the non-titled owner to improve the property. [10] Although the first factor applies only to real property, the other factors, where appropriate, can apply to both real and personal property. [11] William argues that the trial court clearly erred in finding that he intended to make the inheritance marital property. William contests the court's factual findings that he led Susan to believe the assets were hers by saying that they were available during the marriage and that Susan expended her retirement in reliance on William's inheritance. Each of these arguments is discussed below.
Both Susan and William agree that they viewed the A.G. Edwards account as a resource for their future. In Lundquist v. Lundquist we reversed a trial court's determination that an inheritance was marital property. [12] The trial court found that the inheritance was marital property because the owner considered it to belong to both himself and his wife while they were married. [13] We concluded that George's testimony that he assumed that all property received during the marriage should be shared is not sufficient to overcome the strong presumption that an inheritance is separate property. [14] William argues that he, similarly, should not be faulted for assuming and acknowledging during the marriage that his inheritance would benefit both of them while they were married. Once divorced, William contends, Susan is not entitled to the money. Susan distinguishes Lundquist because in that case the money was inherited less than two months prior to separation, whereas William inherited the assets six years before their separation. [15] She contends that the existence of the inheritance and William's representations that it would be available affected her financial decisions. William is correct that his belief and representation that the inherited assets would be available to them during the marriage do not suffice to warrant a finding that the assets were converted to marital property. His statement that the inheritance would be available to them must be understood as referring to the period during which the parties remained married.
William argues that he never promised Susan that the inheritance would be available as an incentive for her to cash in her retirement. Susan argues that both parties viewed the inheritance as a hedge against their old age, so she and William jointly decided that it would not be a problem for her to cash in her retirement. She also argues that the decision not to relocate from Anchor Point was predicated upon the belief that Susan did not need to work because the inheritance money was available. The testimony shows that Susan believed that it was safe to cash in her retirement because William's inheritance was there and that when they discussed the matter, William told her she could cash it in if she wanted, but made no promise regarding the inheritance. Susan then elected to cash in the retirement. William took no action demonstrating an intent to convert his inheritance into marital property. William's general statements that he viewed that money as a hedge for them for the future while he and Susan were married were not evidence of an intent to transmute. The Sampsons decided not to relocate, in part, because Susan did not need to work since there was income from the inheritance. However, this does not establish that William intended to transmute the inheritance. Rather, it is consistent with William's belief that, while they were married, they would enjoy the benefits of his inheritance, as in Lundquist. [16] Because William made no promises to Susan upon which she relied, and because the decision to cash in her retirement was made by Susan, the finding that William intended to transmute his inheritance into marital property is clearly erroneous.