Opinion ID: 1281156
Heading Depth: 1
Heading Rank: 1

Heading: Joan's Appeal.

Text: A. Whether inherited property must be divided in kind and valued at the time of trial. Joan argues that in the process of setting off inherited assets a court should make that division in kind with the assets valued at the time of trial. Using this premise, she suggests that the trial court improperly set off inherited property based on that property's value when received. Joan's argument has some merit, we believe, in situations in which the inherited property does not change in form following its receipt. Where, however, the inheritance is in the form of cash and it is used to buy property during the marriage, the proposition she seeks to advance loses much of its force. In the present case, the inheritances of both parties were in the form of cash and were invested by them in assets, some of which appreciated in value. Decisions on how to use property during the marriage, including inherited property, bear most of the characteristics of a family decision. Barring special circumstances not present here, we believe that the resulting appreciation or loss may be characterized as marital property. We do not disturb the district court's adjustment of assets based on inherited property. Indeed, it is possible to argue that Joan was treated more favorably in this regard than she should have been. In calculating the amount of inherited assets set off to her, the district court included inherited funds that had been entirely consumed during the period of the marriage. B. Division of royalties on textbooks published during the marriage. On the issue of future textbook royalties, we disagree with the district court's determination that the value of those contract rights approximate the value of Joan's law practice. Both parties agreed at trial that the value of Joan's law practice and accounts receivable was only $24,000. Obviously, the present value of Gary's future royalties exceeds that sum. A court may deal with assets for which no present value can be determined by a decree that divides the funds when received. This approach was approved by the court of appeals in In re Marriage of Oler, 451 N.W.2d 9, 12 (Iowa App.1989), and In re Marriage of Curfman, 446 N.W.2d 88, 90 (Iowa App.1989). Gary has contended that gross royalties received by him in the future are conditioned on his performance of promotional services after the termination of the marriage. In addition, this royalty income is an unlikely subject for a qualified domestic support agreement and thus will be taxable to Gary. Our consideration of these two factors causes us to fix Joan's percentage of the future royalties from published texts at thirty percent rather than fifty percent. We also believe that, as a result of our determination concerning the royalty income, fairness requires that the agreed value of Joan's law practice and accounts receivable be equitably divided between the parties. The value of Joan's law practice is $8000. Her accounts receivable are valued at $16,000. Because the accounts receivable, when collected, will generate an income tax liability for Joan and not Gary, we fix his share of these accounts at $5500. We divide the law practice value equally. This fixes Gary's share of these two assets at $9500. With respect to Gary's royalties from William C. Brown Company Publications, this proportion for sharing royalties shall apply to the fifth and prior editions. Any royalties received by Gary from a sixth edition shall be divided eighty percent to Gary and twenty percent to Joan. C. Proposed division of early retirement benefits. We reject Joan's claim that the court should have valued and divided Gary's early retirement benefit package from Iowa State University. Almost all of the benefits received were nonassignable insurance benefits personal to Gary and of no cash value. Additional TIAA/CREF benefits included in the early retirement package were included by the court in the total TIAA/CREF benefits that were divided in the decree. D. Alimony. As a final matter, we consider Joan's argument that she was entitled to alimony. She urges persuasively that her income has always been substantially less than Gary's even after completing her law degree. She argues that property settlements and spousal support serve different purposes, and she should not be forced to consume her property settlement to meet present living expenses. While we are not totally unsympathetic to Joan's plea, we believe that her argument based on comparative income levels loses much force as a result of Gary's retirement. The amount he will be able to earn from writing and publishing is quite speculative. The amount that has been established for his retirement through contributions while he was working has been divided equitably between the parties, thus giving Joan a source of support from Gary's TIAA/CREF accumulations. We conclude that the district court's refusal to award alimony should not be disturbed.