Opinion ID: 871547
Heading Depth: 2
Heading Rank: 2

Heading: Trial on Division of Marital Estate

Text: After extensive discovery by both parties, a one-day trial was held on July 25, 2008 on the division of the parties' marital estate. The parties testified in relevant part as follows.
Bonnie, a 59-year old teacher, testified that she received a gift and several inheritances from two family members during the course of her marriage. Specifically, Bonnie testified that in 1992, she received a $10,000 gift from her stepmother, Violet McLeod, and placed it in a newly-opened account at Owens Mortgage Investment (Owens account). Bonnie placed Aaron's name on the Owens account when it was opened, but testified that she did not intend to make a gift of that money to Aaron. That same year, Bonnie also received a $50,000 inheritance from her aunt's estate, which she put in the Owens account. Bonnie indicated that the 1992 gift and inheritance were intended for her, and not for both her and Aaron. Bonnie testified that in 1995, she removed Aaron's name from the Owens account. Bonnie further testified that while Aaron's name was on the account between 1992-1995, Aaron did not contribute any funds to that account, nor did he do so at any other time. Bonnie recalled that after 1995, she withdrew money from the Owens account to pay for education and household expenses. Bonnie testified that after 1995, she received an inheritance from her stepmother that was distributed to her in approximately the following amounts: $33,334, $308,000, $500,000, and $3,333. Bonnie testified that these monies were placed in either the Owens account or a Smith Barney account. Bonnie further testified that neither she nor Aaron have ever contributed any additional money to these accounts; she had other people managing these accounts; and Aaron knew that the money in these accounts was Bonnie's. Bonnie testified that during the divorce proceedings, she made some withdrawals from her accounts to pay for regular living expenses[,] attorneys' fees[,] and a number of trips. Bonnie indicated that during her marriage, it was usual and customary for her to take trips and to pay for her children's travel expenses.
Aaron, a 56-year old attorney, testified that sometime in 2001, his law practice began to decline and he suffered from health issues. Aaron was aware that in 2002, Bonnie inherited money, but he indicated that Bonnie did not express to him verbally or in writing that she intended that the money be kept her sole property, that the money was not to be used for marital purposes, or that the money was not to be managed or touched during the marriage. Aaron then testified about how he believed the money in the parties' accounts should be divided in light of his characterization of each asset. With regard to Bonnie's inherited money accounts, Aaron testified that Bonnie would get her basis back, but the appreciation, had there been any, would be split fifty-fifty. Aaron also testified about withdrawals that Bonnie made from her inheritance-funded accounts during the divorce proceedings, which Aaron claimed were in contemplation of divorce. According to Aaron, these withdrawals roughly amounted to $400,000. Aaron testified that Bonnie should be credited with having received [$]400,000. When Aaron attempted to point to his medical condition as a basis for equalization payments, Bonnie's counsel objected, stating, If he was going to put his condition in evidence, [she] should have been permitted to get his medical records. The family court sustained the objection. At the court's direction, the parties submitted their closing arguments in writing. The parties' closing arguments centered around the following main issues: (1) whether Bonnie's gift and inheritances were Marital Separate Property or Marital Partnership Property; [4] (2) whether the Marital Partnership Property should be awarded one-half to each spouse; (3) whether there were any valid and relevant circumstances (VARCs) for equitable deviation; and (4) whether Aaron's pretrial motions regarding Bonnie's alleged violation of the pretrial order against waste should be granted. In his closing arguments, Aaron argued that: (1) the marital estate was entirely comprised of Marital Partnership Property; and (2) Bonnie was fiscally irresponsible during the divorce and improperly made withdrawals in contemplation of divorce. With regard to the division of the marital estate, Aaron specifically argued that Bonnie's inheritance-funded accounts were Marital Partnership Property, not Marital Separate Property, because they were not expressly classified as Bonnie's separate property or maintained by [themselves] as required under Hussey. Additionally, Aaron argued that Bonnie exhibited fiscal irresponsibility and violated the pretrial order when she made sizable withdrawals from her inheritance-funded accounts during the divorce proceedings. Accordingly, Aaron contended that Bonnie should be equitably charged with having received the dollar value of the reduction. In her closing arguments, Bonnie maintained that: (1) her inheritance-funded accounts were Marital Separate Property under Hussey ; (2) the Marital Partnership Property should be awarded one-half to each spouse pursuant to the Partnership Model; (3) equitable deviation from the Partnership Model was not warranted because Aaron is a licensed attorney with marketable skills; and (4) the family court should deny Aaron's motions because Bonnie's expenditures were justified by the high cost of litigation and her necessary travel expenses.