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DIVORCE 11: Is stock gifted before marriage a non-marital asset?

Plaintiff filed for divorce in 2015. Before the date set for trial, plaintiff filed a motion for summary disposition seeking a determination that the 10% of the Stock was non-marital property because her father gifted it to her.

In support of her motion she presented two affidavits. One was signed by her brother who, since their father’s death, manages the company. He averred that their father gifted the full 10% in July 1999, shortly before plaintiff married defendant, and that it was gifted at that time specifically to assure that it would not be marital property. His affidavit also stated that defendant had not undertaken any activities that contributed to any appreciation in the value of the company. The second affidavit proffered by plaintiff was signed by her father’s CPA, who averred that the full 10% interest was transferred to plaintiff before her marriage to defendant.

In response, defendant submitted his own affidavit in which defendant averred that in his role as an insurance adjuster, he referred many clients.  He also averred that the subject stock had produced dividends of approximately $300,000 during the 13 years of the marriage, that those funds were intermingled with other family funds, and that the couple jointly paid taxes on them.

A trial court’s first consideration when dividing property in divorce proceedings is the determination of marital and separate assets.  The fact that an asset is obtained as a separate asset does not mean its status cannot change.  Separate assets may lose their character as separate property and transform into marital property if they are commingled with marital assets and treated by the parties as marital property. This principle applies to inherited property.  Property received by a married person as an inheritance, but kept separate from marital property, is deemed to be separate property not subject to distribution.  The mere fact that property may be held jointly or individually is not necessarily dispositive of whether the property is classified as separate or marital.

In this case, a genuine issue of material fact exists as to whether the 10% ownership interest in Stock was a marital or separate asset.  The trial court would have to consider whether the funds had been intermingled and whether defendant had contributed to the value of the stock.

Are you facing a divorce in Michigan? Do you have questions about how your assets and your debts will be divided with your soon-to-be ex-spouse?  Financial issues are often the biggest concern for individuals and families who are facing divorce.

At the Plymouth and Ann Arbor law firm of Aldrich Legal Services, our attorneys understand the struggles you may face. We will work hard to help you obtain all to which you are entitled during your divorce.

Contact Aldrich Legal Services

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