|
|
|
Premarital Student Loan Paid with Marital Funds
© 2004 National Legal Research Group, Inc.
NEBRASKA: Gangwish v. Gangwish, 267 Neb. 901, 678 N.W.2d 503 (2004).
Where the wife brought a student loan into the marriage, and the loan was paid off with marital funds, the trial court erred by not reducing the wife's property award by the total amount of marital payments on the debt. But the sum involved was less than one-half of one percent of the $1 million marital estate, so the error was too small to justify reversal. Where the husband's father made equal gifts of stock to the husband and the wife in order to obtain favorable tax consequences, and the wife then transferred her stock to the husband, only the shares given directly to the husband were the husband's separate property. The remaining shares were the wife's separate property initially, and became marital property when transferred to the husband. The father's intent to benefit only the husband is irrelevant, as he actually transferred stock to the wife.
Following the granting of the parties' dissolution of marriage, the husband appealed on several grounds. The husband first alleged that the trial court had erred in failing to account adequately for the student loans that the wife had brought into the marriage, which amounted to approximately $12,400. During the marriage, the loans were paid off with marital funds. In its decree, however, the trial court accounted for only $7,000 of the debt. On appeal, this was held to constitute error. The wife's award should have been reduced by the total student debt that she brought into the marriage because the debt was paid off with marital assets. However, when placed within the context of the property division as a whole, wherein the marital estate totaled well over $1 million, no abuse of discretion was found as it could not be concluded that less than one-half of one percent of this total deprived the husband of a substantial right or a just result, which is the standard by which an abuse of discretion is measured.
The husband next alleged error on the part of the trial court in failing to give him a credit for approximately $10,600 in personal, premarital funds that he expended on the parties' first home. As there was sufficient proof to show that the husband had made a substantial contribution to what became a joint asset from his personal funds, he would normally be entitled to a credit in that amount. To rule otherwise would be to presume that his expenditures in personal, premarital assets were gifts to the wife. This, stated the court, it would not do. The court also noted that it did not matter that the property was titled in both parties' names. The manner in which property is titled or transferred by the parties during the marriage does not restrict the trial court's ability to determine how the property should be divided. However, under the circumstances present, as shown on the face of the record, the court denied the credit sought by the husband. He was unable to trace the personal, premarital funds after the sale of the parties' first and then second homes, funds which were later loaned to a corporation established by the parties, and, thus, could not show that the separate nature of the personal assets was retained.
Finally, the husband objected to the trial court's decision in awarding certain shares of stock to the wife which had been gifted by the husband's father during the marriage. In 1994, the husband and wife each received a certificate for eight shares of stock in the father's seed company. Two years later, the wife transferred her shares to the husband. That same year, each received a certificate for six shares of the same stock from the husband's father. Several months later, the wife again transferred her shares to the husband. The husband's father testified that it was his desire to give all 28 shares to his son, but, out of concern for tax consequences, he chose to gift one-half of the shares to the wife, with the intention that she would later transfer them to the husband. Both parties were aware of this intention when the husband's father made the gifts. The trial court determined that all 28 shares were marital property and allocated one-half to each party. While the general rule is that all property accumulated and acquired during the marriage is presumed to be marital property, one exception is property accumulated and acquired by one spouse by gift or inheritance. On appeal, the court agreed that the evidence showed that the father wanted his son to obtain eventual possession of all of the 28 shares. However, it recognized that the father gave only 14 of those shares to his son. He was entitled, therefore, to only those 14 shares as separate property. As to the 14 shares given to the wife, upon her transferring ownership to the husband, they lost their status as a gift and became part of the marital estate and as such were subject to division. Because there was no evidence as to the value of the stock, the court of appeals determined that the shares should be divided equally and ordered the trial court to amend its decree to award the wife seven shares of the stock and the remainder to the husband.
Go to: Debts Category
Go to: Cases of Interest by Category
Go to: Previous Page
| Featured Services | |
|
| The Research Center: (Divorce Cases of Interest) | Research Home | ||||
Find Case Law, Case Analysis, and Divorce Information...
| |||||
Copyright© 1996-2009. All rights reserved by Divorce Source, Inc.
Comments & Suggestions? or Recommend This Page to a Friend!