Opinion ID: 900641
Heading Depth: 1
Heading Rank: 3

Heading: Kenny Albrecht Property

Text: [¶ 13.] The trial court found that Kenneth and Beverly Albrecht agreed to sell the Kenny Albrecht property to Todd on a contract for deed with a total purchase price of $69,300, with $23,300 down, and the balance to be paid in installments. The trial court also found that the terms of the contract for deed were entirely negotiated by Todd's father. Further, the trial court found that Todd's father arranged the payment of the down payment and categorized his payments to Todd for tax purposes as land rent and the amount paid was grossly in excess of the going cash rent rate. The trial court ultimately held that the usage and course of dealing between [Albrecht & Sons] and [Todd] ... indicated an arrangement other than a landlord/tenant arrangement and reflected the true intent of [Todd's] father, Henry Albrecht and [Todd], to gift the funds necessary for [Todd] to make Contract for Deed payments. The trial court held that the $69,300 purchase price is not marital property, but the increase in fair market value of $19,700 was marital property subject to division. [¶ 14.] Jill contends that [a]ll property of both parties is subject to an equitable division regardless of origin or title. Further, Jill claims that because the property was clearly acquired during the marriage and [she] did contribute to the accumulation and maintenance of this property, the entire value of $89,000 should have been included as a marital asset. In support of her argument, Jill cites Garnos, 376 N.W.2d 571 and Prentice v. Prentice, 322 N.W.2d 880, 882 (S.D. 1982). Both cases cited by Jill involve a dispute as to whether the wife made any contribution to the disputed property. [2] In the present case, the issue in question is not whether Jill substantially contributed to the Kenny Albrecht property; rather, whether the property was a gift to Todd and partially excludable from the property division. Todd argues that considerable and extensive testimony was offered at trial that Todd got the [Kenny Albrecht] land free from his dad and therefore, it is a gift and should not be included as a marital asset. A review of the record does not support this contention. Todd utilized the rent payments of $10,254.32 received from Albrecht & Sons to make his annual contract for deed payment of $10,254.32 to Kenny Albrecht. There were no documents drafted which described this transaction as a gift, nor was there a gift tax paid. In fact, Albrecht & Sons included its payment to Todd as a rent expense for a tax deduction on their income tax form. Further, Todd treated the payment as rental income on Todd and Jill's joint income tax return. [¶ 15.] We have often stated that the essential elements of a gift are: intent, delivery, and acceptance. Estate of Fiksdal, 388 N.W.2d 133, 135 (S.D.1986) (citing Owen v. Owen, 351 N.W.2d 139 (S.D.1984); Bunt v. Fairbanks, 81 S.D. 255, 258, 134 N.W.2d 1, 2 (1965)). Further, [t]he donor's intent must be shown in order to determine that a gift has been made. Id. The record does not establish a bona fide intent by Todd's father to make a gift of the Kenny Albrecht property. In fact, testimony during the divorce proceeding from Todd's father provides: Q: (Wilkinson): Henry, why did you write the checks to Todd and write the checks to bill for those contract payments? A: (Henry): I continued to farm the land until the contract was paid off and it was for rent. (Emphasis added). Based upon the evidence and record herein, [3] we find that the trial court's conclusion that the Kenny Albrecht land transaction constituted a gift was an abuse of discretion. Based on this record, the gift theory on this asset seems to have been birthed solely for the purposes of this divorce action. [4] Therefore, the full $89,000 value of this asset should have been included in the marital estate.