Opinion ID: 2637200
Heading Depth: 3
Heading Rank: 3

Heading: Characterization of Gold Coins as Gail's Separate Property

Text: Kevin contends in his cross-appeal that the superior court erred in characterizing the gold coins as Gail's separate property and precluding him from receiving a portion of their value. We reject Kevin's argument because the record does not show that Gail intended to contribute the coins to the marital estate. [33] The first step in dividing a marital estate is determining which assets to include in the estate, [34] which requires characterizing the couple's assets as separate or marital. [35] Whether the trial court used the correct legal standard in characterizing property is an issue of law that we review de novo. [36] A spouse's separate property can become part of the marital property through transmutation. [37] Separate property can become marital property where that is the intent of the owner and there is an act or acts which demonstrate that intent. [38] With respect to real property, this requirement may be met where a non-owner spouse devote[s] substantial efforts to [the property's] management, maintenance, or improvement. [39] Kevin contends that Gail's exclusive interest in the apartment complex transmuted to become marital property because he managed the apartment complex and worked there without any pay. He reasons that, because the apartment complex was marital property, the gold coins the parties acquired after selling the property also became part of the marital estate. But the superior court considered conflicting testimony on this point and resolved the conflict by expressly finding that Kevin had received compensation for his work at the apartment complex. It is not our place to question the superior court's resolution of factual disputes, especially when the court's resolution turns on issues of testimonial credibility. [40] Given the trial court's superior ability to assess the facts and evaluate the truthfulness of a witness, we must uphold the trial court's ruling on this point. [41] Kevin also argues that the coins transmuted after being acquired. There was evidence that Gail used a portion of the property sale proceeds to pay for family expenses. Additionally, there was evidence that she had wanted to use the proceeds to purchase an investment for the family and reluctantly agreed to Kevin's demand to use the money to purchase gold coins. Though the parties agreed that the coins were ostensibly purchased to provide the family with insurance, there is no evidence that the coins were actually used for this or any other purpose. The superior court found that Gail purchased gold coins with $50,000 of her share [of the property sale proceeds] and the coins remain her independent non-marital property. We agree with the superior court's ruling. Transmutation requires something more than a bare intent to make separate property marital; the intent must be accompanied by conduct aimed at effectuating that intent. [42] Here, the evidence fails to show any step by Gail that could be construed as an action intended to transmute the disputed coins into marital property. The coins simply remained untouched and unused in the family's vault. [43] Because no act or acts demonstrated an intent by Gail to convey the coins to the marital estate, the superior court properly ruled that the coins continued to be her separate property.