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DATE OF VALUATION OF MARITAL DEBT
© 2001 National Legal Research Group, Inc.
IOWA: In re Marriage of Moomaw, No. 1-119/00-869 (Iowa Ct. App. June 13, 2001).
The husband claimed that the debts that the wife incurred after the parties separated should not have been considered as debts of the marriage.
Here, the couple were married in 1964. At the time of the dissolution hearing, on April 11, 2000, the husband was 60 years old. He received a retirement pension amount of $2,025 per month, which after withholding taxes gave him $1,816 per month. The husband testified that his net monthly income would not change greatly after he begins to receive Social Security payments, as his pension will be reduced accordingly. He is in good health.
The wife was 59 years old at the time of the dissolution hearing. She worked as a teacher, substitute teacher, and youth counselor during the marriage. She had not worked since 1992 because of health problems, including depression and post-traumatic stress syndrome. She took prescribed medication for her condition. The wife received disability Social Security of $675 per month and IPERS retirement payments of $325 per month.
The couple separated in July 1999, when the wife filed a petition for dissolution of marriage. The husband moved to Texas, where he purchased a trailer valued at $7,000. The wife remained in the marital residence, valued at $74,000. The wife incurred some debts after the parties' separation.
The district court entered a dissolution decree for the parties on May 16, 2000. The lower court noted that the wife would likely have significant medical expenses in the future. The court ordered the husband to execute a qualified domestic relations order to pay the wife $400 per month from his pension benefits, to continue for her lifetime.
The lower court awarded the husband assets worth $40,716, which included his trailer, pickup, cash, bank account, furniture, and tools. The husband was ordered to pay debts of $14,361, giving him total net assets of $26,355. The court awarded the wife assets worth $85,231, which included the marital residence, her car, cash, and furniture. She was ordered to pay debts of $6,550, giving her total net assets of $78,681. The husband appealed the division of property. He claimed the debts that the wife incurred after the parties separated should not have been considered as debts of the marriage. He stated that the wife should be responsible for a loan of $6,500 on her vehicle. He also asked to receive one-half of the equity in the marital home. These changes would have resulted in the husband receiving total net assets of $69,855 and the wife receiving total net assets of $35,181.
The appellate court noted that "parties to a marriage are entitled to a just and equitable share of the property accumulated during the marriage. In re Marriage of Bonnette, 584 N.W.2d 713, 714 (Iowa Ct. App. 1998). Equitable distribution does not necessarily mean an equal division of property, nor does it mean a percentage division of the property. Id."
The husband claimed the debts that the wife incurred after the couple's separation were frivolous and a waste of marital funds. The wife testified that she used the funds for attorney's fees, repairs to the marital home, and living expenses.
The appellate court noted:
The date of the dissolution is the only reasonable time when an assessment of the parties' net worth should be undertaken. We value property for division purposes at its value at the time of the dissolution. It is the net worth of the parties at the time of trial which is relevant in adjusting property rights. Expenditures made during a separation should, in some cases, be considered in making an equitable distribution. In re Marriage of Fall, 593 N.W.2d 164, 168 (Iowa Ct. App. 1999) (citations omitted).
In the present case, as well, the couple's net worth at the time of trial should be used to determine an equitable distribution of property.
The court noted that the wife had health problems and required many prescription medications, which would be a significant expense to her in the future. She was unable to work and thus could not earn more money. The husband had the ability to work, although he was retired.
The court stated: "In balancing the equities in this case, we determine [the wife] should be required to pay the debt of $6500 which she took out against the value of her car. This will give [the wife] total net assets of $72,181 and [the husband] total net assets of $32,855."
The appeals court affirmed the decision of the district court. In addition, it assigned the costs of the appeal one-half to each party.
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