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Physical Removal of Separate Home to Jointly Titled Marital Lot
© 2004 National Legal Research Group, Inc.
NORTH CAROLINA: Goldston v. Goldston, 159 N.C. App. 180, 582 S.E.2d 685 (2003).
The husband physically moved his separate property home from a separate property lot to a marital property lot titled in the names of both parties as tenants by the entirety. A trial court holding that the house became marital property was reversed. The joint title gift presumption applies only to property acquired in joint title during the marriage. Since the home was acquired before the marriage, no presumption of gift applied. The evidence was not sufficient to prove that the husband intended to make a gift of the home to the marital estate. Thus, the combined house and new lot were part marital and part separate property.
The husband appealed a decision by the trial court granting a divorce in which it awarded to the wife a share of the proceeds from the sale of a house located on a lot that had been the sole property of the husband. The appellate court reversed the lower court's classification of the house as marital property.
The record established that, prior to the marriage, the husband owned a house situated on a lot titled in his name alone. After the marriage, the husband moved the house to a different lot, one that had been deeded to the husband and the wife as tenants by the entirety by the husband's parents. Subsequent thereto, the husband deeded the lot that had been in his name alone to himself and the wife as tenants by the entirety. After the parties separated, the husband sold the house and lot and segregated the funds in an interest bearing account. The trial court classified the proceeds as marital and divided them between the husband and the wife.
The husband argued that, under the circumstances of this case, the proceeds were part marital and part separate property. The appellate court agreed. While assets acquired during the marriage by either spouse are deemed marital property, an asset can have a dual nature and can be classified as part separate and part marital. Where a property has such a dual nature, the courts apply a source of funds rule to distinguish between marital and separate contributions to the asset. When both the marital and separate estates contribute to the acquisition of property, each shares an interest according to the ratio its contribution bears to the total investment. Looking to the peculiar facts of the case, the appellate court declined to find that the act of moving the separately held house to a jointly held lot constituted the transmuting of the house to marital property. As there was no other evidence offered as to the husband's donative intent to make the house a marital asset, the wife had failed to meet her burden of rebutting the statutory mandate that separate property remain separate unless a contrary intent is expressly stated in the conveyance. See N.C. Gen. Stat. 50-20(b)(2). The proceeds from the sale of the house and lot, therefore, were determined to be dual in nature, and the trial court erred in classifying all of the proceeds as marital property. The court's ruling in this regard was no different from earlier case law in which the parties built a home on an unimproved lot that had been owned by one spouse prior to the marriage where there was no evidence of the spouse's donative intention.
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