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Gift - Tracing Commingled Bank Account for Divorce Purposes
© 2005 National Legal Research Group, Inc.
FLORIDA: Lakin v. Lakin, 901 So. 2d 186 (Fla. 4th Dist. Ct. App. 2005)
A jointly titled commingled account containing a three-way mixture of marital property, the husband's nonmarital property, and the wife's nonmarital property was properly classified as a marital asset, as the separate interests (which probably could not be traced on the facts in any event) had been given to the marital estate. The husband's decision to transfer the balance in the account to a separately titled account on the eve of the divorce was evidence of donative intent, for he clearly treated the wife's nonmarital interest as marital property, and that treatment suggests an intent to likewise treat his own nonmarital interest as marital property.
During the marriage, the husband received an inheritance of $161,148 from his mother. He deposited the inheritance into a joint checking account. One week later, he withdrew $134,000 and placed it into a joint investment account (the 5661 account). Deposits to the 5661 account in the following months included the balance of another jointly titled investment account containing the wife's premarital liquid wealth, $24,000 from the sale of a marital boat, and funds obtained from refinancing the marital home. Upon separation, the husband transferred almost the entire balance of the 5661 account into a new account in his own name, the 1107 account.
The trial court held that the 1107 account was marital property. The appellate court affirmed, finding that the separate funds in the account had been given to the marital estate:
A collection of activities demonstrates that the parties treated the entirety of the Schwab account as a marital asset. Interest from bonds and dividends from the securities were transferred into the money market portion of this account. Proceeds from the sale of the marital boat, additional money inherited from the husband's mother, and funds obtained from refinancing the marital home were all deposited into the Schwab account. When marital problems surfaced, the husband transferred all the securities in the joint account into an account in his name only. Included in this transfer was the Nokia stock that had once been the wife's pre-marital property. Applying the rule of what is good for the goose is good for the gander, the trial court could properly have viewed this transfer as evidence that all securities in the account were marital property.
Id. at 191. The court also rejected the husband's argument that the investment portion of the 5661 account should be classified differently from the money market portion:
The husband contends that the securities in # 5661 retained their non-marital character, because they were kept separate from the money market portion of the same account. However, the trial court was not required to adopt this artificial view of the evidence, which divided a single brokerage account into discrete units.
Id.
Editor's Note: The clarity of the Lakin opinion suffers from the failure to distinguish clearly between the law of tracing and the law of gifts. Before reaching the gift issue, a good argument exists that a separate interest in the 1107 account had not been established with reasonable accuracy. The account was clearly traceable to a three-way combination made up of marital sources, the wife's nonmarital sources, and the husband's nonmarital sources, and funds had clearly flown out of as well as into the account. From the facts set forth in the opinion, it is at least difficult and probably impossible to determine how much of the final balance in the account was traceable to each source, making the entire mixture marital property.
The court's suggestion that different parts of an account cannot ever be classified differently is questionable. If no gift was made, and the investment portion of an account is clearly traceable to a separate source, and the money market portion of an account is clearly traceable to a marital source, the two portions should have different classifications. If that is not true, then all commingled bank accounts are automatically marital, and there would have been no need for the court to reach the gift issue. Also, past Florida cases have held that a commingled account can have both marital and separate interests if the law of tracing can identify them. See O'Neil v. Drummond, 824 So. 2d 1032 (Fla. 1st Dist. Ct. App. 2002); Witowski v. Witowski, 758 So. 2d 1181 (Fla. 2d Dist. Ct. App. 2000). On the facts of Lakin, however, the facts necessary to prove simultaneous marital and separate interests were lacking.
While Florida requires the positive tracing of commingled accounts, it does not apparently presume donative intent from the mere fact of joint title, as it does with real property. E.g., Spielberger v. Spielberger, 712 So. 2d 835 (Fla. 4th Dist. Ct. App. 1998). Nevertheless, joint title is still at least some evidence of a gift. Given the repeated commingling of funds in the accounts, the court's finding that a gift occurred on the facts is not surprising. Of particular interest is the court's finding that by withdrawing funds that included the wife's separate property the husband demonstrated an intent to treat both parties' premarital value as marital property. Even where outright dissipation is not present, questionable financial conduct during the closing days of a marriage often seems to harm the acting spouse on other issues.
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