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INDIVIDUAL RETIREMENT ACCOUNTS
© 2000 National Legal Research Group, Inc.
MISSOURI: Ansley v. Ansley, 15 S.W.3d 28 (Mo. Ct. App. 2000).
The evidence in the case supported the finding that the Individual Retirement Accounts (IRAs) were the husband's nonmarital property.
The couple was married in 1980, when both were gainfully employed. The husband was in the banking industry, while the wife worked as a manager in computer software development. The couple's first child was born in 1983, and the wife quit her job in order to stay home. The second child was born in 1984.
In 1990, the husband was transferred to Kansas City, where the couple purchased a home for $425,000. The husband was laid off in 1995 and was given a severance package for the remainder of the year. In January 1996, the husband took a new job in Atlanta, Georgia. The wife and the children remained in Kansas City and were to move to Atlanta as soon as the marital residence was sold. In April 1996, before the marital residence was sold, the husband informed the wife that he no longer wanted to remain married. In July 1996, the husband filed a petition for dissolution in Missouri.
The court accepted the husband's proposed division of the marital property, awarded the nonmarital property, denied the wife's request for monthly maintenance, and denied the wife's request for attorney's fees.
The wife filed certain post-trial motions. In March 1998, the court found that a certain Northwestern Mutual Life Insurance policy was marital property and that a Scudder and a Fidelity IRA were the husband's nonmarital property. The wife appealed.
The wife asserted that the trial court erred in setting aside the Scudder Investments IRA acquired after 1980 and a Fidelity Investments IRA purchased in 1985 as nonmarital property for the husband. The wife asserted that the husband failed to rebut a presumption that these assets were marital property.
The court noted that "property . . . acquired before the marriage that remains titled in the separate name of its original owner is separate property. Glenn v. Glenn, 930 S.W.2d 519, 523 (Mo. App. 1996). All property acquired by a married couple subsequent to marriage, however, is presumed to be marital property subject to limited exceptions. . . ." Id. at 35.
After a consideration of the exceptions, the court noted that since the IRAs were acquired after the couple's marriage in 1980, but before the legal decree of separation or divorce, the IRAs are presumed to be marital property. The "husband, as the party claiming the IRA as his separate property, bears the burden of proving the property is his non-marital property." Id. (citing Sprock v. Sprock, 882 S.W.2d 183, 185 (Mo. Ct. App. 1994).
The husband had testified at trial that he opened the Fidelity account with $1,000 in 1977, prior to his marriage in 1980. On cross-examination, however, he admitted that the Fidelity account was opened in 1985, but testified that it had been opened with old bank certificates of deposit he had purchased prior to the marriage. He also testified that the Scudder IRA was purchased with CDs that had been purchased in 1976 and 1978 or 1979. The husband claimed that he could not find the records of these transactions.
The husband stated that these funds were always kept separate, and no marital funds were ever added to the investments. The husband claimed that the IRAs remained his separate, nonmarital property under the "source of funds" rule. The source of funds rule states that the character of the property is determined according to the source of funds that financed the purchase, regardless of the date of purchase.
The wife testified that she was unaware that the husband owned any IRAs at the time of the marriage and believed that the accounts were opened during the marriage with marital funds and that they were thus marital property. The wife produced financial statements from 1979 and 1981 that failed to list either the Fidelity or Scudder IRAs, or their alleged predecessor accounts. The husband claimed that the IRAs were not listed in the 1979 statement because that statement only listed a total amount for his assets, without itemizing each individual investment. He further explained that the 1981 financial statement lacked any mention of the IRAs because the wife had prepared the statement and she did not have any knowledge of the funds.
While the evidence surrounding the origin of these funds was disputed and highly suspect on the one hand, the trial court was free to believe the husband's testimony over the wife's testimony. The trial court then concluded that no marital funds were expended on the purchase of the IRAs. There was no evidence that the IRAs were ever transmuted into marital property. The court of appeals held that it was not an abuse of discretion for the court to conclude that the IRAs were the husband's nonmarital property.
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