Opinion ID: 1751673
Heading Depth: 2
Heading Rank: 1

Heading: Property Division Issues

Text: To determine whether there was an abuse of discretion in the award, this Court must first examine the proper legal classifications of the assets claimed by both parties. Only then can this Court determine whether the property division was equitable. Wayne contends the chancellor was manifestly wrong in awarding to Jane a one-half interest of the present value in his retirement plan with MP & L, his savings plan with Entergy Corporation, and his employee stock ownership plan (ESOP). However, these assets accumulated during the marriage are, for the purpose of this divorce, marital property subject to equitable division unless it can be shown by proof that such assets are attributable to one of the parties' separate estates prior to the marriage or outside the marriage. Hemsley v. Hemsley, 639 So.2d 909, 914, 915 (Miss. 1994). Despite Wayne's assertions, under Hemsley these assets are marital property properly subject to equitable distribution. Id. Pursuant to Hemsley, this Court assumes that Jane's domestic contributions are equally as valuable as the contributions made by Wayne toward his retirement and savings plans. Id. at 915. Jane inherited assets during the marriage and, at the time of the divorce, had allowed some of these assets, i.e., monies from timber sales, to be used for the benefit of the entire family. [2] She had received a combined total of $153,000 from the sale of trees in 1979, 1985, and 1988. Practically all of this money was used for the benefit of the family or placed in savings accounts controlled by Wayne. Wayne returned $66,000 of this amount to Jane. Jane claims this inherited property, i.e., timber lands, constitutes nonmarital property and Wayne offers no proof to the contrary. Jane initially met the requirements of Hemsley, i.e., she rebutted the presumption that her inherited real property was marital property subject to equitable distribution. When, however, she commingled the monies received from the sale of timber, she converted these nonmarital assets to marital assets, subject to equitable distribution unless subject to an agreement to the contrary. Jane also inherited assets that were never commingled with funds for the family. Again, Wayne does not dispute the nonmarital character of these assets; therefore, the Hemsley presumption is rebutted and these assets are not subject to equitable distribution. This nonmarital property consists of a rental house, timber land, and marketable timber, as described in the statement of facts. However, there was a lien of $55,913 on a rental dwelling and Lamar County timber land. Jane testified that she had been forced to borrow over $58,000, including the money advanced under the lien, to support herself and her children since the filing of the divorce. Jane, as of July 14, 1992, also had accounts payable in the amount of $4,585. In the case sub judice it is undisputed that the assets inherited by Jane are attributable to Jane's nonmarital estate. However, that portion of those assets which were commingled with the joint marital estate, i.e., timber sales, for the use of the family had, at the time of trial, lost their nonmarital character by commingling. See Nelson v. Nelson, 611 So.2d 1113, 1115 (Ala. Civ. App. 1992) (commingled funds are marital assets subject to equitable distribution). Any assets inherited by Jane but not commingled retained their nonmarital character. Hemsley, 639 So.2d at 914. The $66,000.00 paid back to Jane by Wayne reacquired its nonmarital character by virtue of Wayne's actions. Id. Wayne had no nonmarital estate of his own. As previously stated, his pension and retirement plans are presumptively part of the marital estate for purposes of divorce, as they were acquired by the efforts of both Jane and Wayne during the course of the marriage. Hemsley, 639 So.2d at 914, 915. Consequently, these plans are subject to equitable division pursuant to Hemsley. Id. As to liabilities, Wayne also has a $142,000 judgment against him, based on medical bills to a hospital and clinic, incurred by his son Kendall. [3] Wayne signed for payment of these bills and this debt is not the subject of any issue presented to this Court. Nonetheless, this debt must be considered in any equitable distribution of property as it affects Wayne's net income, a Ferguson v. Ferguson, 639 So.2d 921, 928 (Miss. 1994) factor. If the question of alimony is reached, the debt would again be a factor for consideration. Jane had average monthly expenses of at least $2,600, plus liability for one-half uncovered medical expenses, college expenses, and all maintenance and repair on the home. She had no professional skills and no salary income. In contrast, Wayne had an effective net salary, according to the chancellor, of $66,900 annually. Division of marital assets is now governed under the law as stated in Hemsley and Ferguson. First, the character of the parties' assets, i.e., marital or nonmarital, must be determined pursuant to Hemsley. The marital property is then equitably divided, employing the Ferguson factors as guidelines, in light of each parties' nonmarital property. Ferguson, 639 So.2d at 928. If there are sufficient marital assets which, when equitably divided and considered with each spouse's nonmarital assets, will adequately provide for both parties, no more need be done. If the situation is such that an equitable division of marital property, considered with each party's nonmarital assets, leaves a deficit for one party, then alimony based on the value of nonmarital assets should be considered. [4] This process does not require divestiture of inherited or gift-acquired nonmarital property. However, this Court cannot determine whether the chancellor abused his discretion until he provides a record of his determination of both parties' nonmarital assets, of his equitable distribution in light of each parties' nonmarital property, guided by the Ferguson factors, and, if necessary to do equity, of any award of alimony. Due consideration should be given to Wayne's $142,000.00 debt. This Court must, therefore, remand for reexamination of the entire case. After consideration of the parties' nonmarital estates and of the marital estate, the chancellor may adjust his awards to do equity, and has considerable latitude in doing so. Ferguson, 639 So.2d at 927; Jones v. Jones, 532 So.2d 574, 580 (Miss. 1988).