In Re Marriage of Box
968 S.W.2d 161, 1998 Mo. App. LEXIS 684, 1998 WL 178636 (1998)
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Rule of Law:
Income generated during a marriage from one spouse's separate non-marital property, such as interest, rental income, or periodic pension payments from a pre-vested plan, is generally considered marital property subject to division upon dissolution, provided it is not explicitly excluded by a valid antenuptial agreement or transmuted by clear and convincing evidence of both parties' mutual intent.
Facts:
- Robert James Box and Virginia Lehe Box married on October 22, 1988, which was the third marriage for both parties.
- At the time of marriage, Robert owned a debt-free duplex (living in one unit and renting the other) and a checking account with a balance of $57,567.60.
- Before the marriage, Robert and Virginia signed an antenuptial agreement stating that each party would retain the property they owned in their own names, and neither would acquire rights in the other's listed property, which included Robert’s duplex and checking account.
- During the marriage, Robert regularly deposited his monthly Social Security checks, monthly pension checks, and rental income from his duplex into his checking account, which was held solely in his name.
- Virginia maintained her own separate checking account throughout the marriage, into which she deposited her Social Security checks, and Robert’s name was never on it.
- Robert’s checking account earned interest throughout the marriage and also received modest gains from his buying, restoring, and selling five automobiles.
- The parties separated on September 11, 1996, at which point Robert's checking account balance had increased to $146,261.08, representing an increase of $88,693.48 during the marriage.
Procedural Posture:
- Robert James Box and Virginia Lehe Box's marriage was dissolved by a state trial court (court of first instance).
- The state trial court ruled that the $88,693.48 increase in Robert's checking account during the marriage was marital property, while the initial $57,567.60 balance remained his separate property.
- The state trial court awarded Virginia $29,565 from the marital portion of Robert’s checking account.
- Robert (Appellant) appealed this judgment to the Missouri Court of Appeals, Southern District (intermediate appellate court), challenging the award to Virginia.
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Issue:
Does income generated during a marriage from a spouse's non-marital property, specifically interest, rental income, and payments from a pre-vested pension plan, constitute marital property subject to division upon dissolution of marriage, absent an explicit agreement or clear intent otherwise?
Opinions:
Majority - Crow, Judge
Yes, income generated during a marriage from a spouse's non-marital property, including interest, rental income, and payments from a pre-vested pension plan, generally constitutes marital property subject to division upon dissolution, unless specifically excluded by a valid agreement or transmuted by mutual intent. The court first addressed Robert's claim that the antenuptial agreement or the parties' conduct excluded the account increase from marital property. The court held that the antenuptial agreement only covered property owned at the time of marriage and did not indicate Virginia waived claims to assets acquired by Robert after the wedding, including increases in his account. Unlike in Fuqua v. Fuqua, there was no clear and convincing evidence that both parties intended the increase to remain Robert’s separate property; Virginia never testified she intended the increase to be separate. The court then clarified that, under § 452.330.2 RSMo 1994, property acquired during marriage is presumed marital. Citing precedents like Coleberd v. Coleberd, Williams v. Williams, and Bizzell v. Bizzell, the court affirmed that interest earned by non-marital property and rental income from non-marital property during a marriage are marital property. Extending this principle, the court concluded that periodic income received from a fully vested pension plan during the marriage, even if the plan itself was non-marital, is 'property acquired by [Robert] subsequent to the marriage' and thus marital property, as the record did not rebut this presumption. However, Social Security benefits are explicitly unassignable as marital or separate property per § 169.572 RSMo 1994 and Hogan v. Hogan. The court recognized Robert's account contained commingled funds from Social Security (non-marital), pension income (marital), rental income (marital), and interest (marital). By analyzing the proportion of monthly deposits, the court found that 62% of the $88,693.48 increase was attributable to marital sources, totaling $54,989.96. Applying the abuse of discretion standard, the court affirmed the trial court's award of $29,565 to Virginia from this marital increase, finding it reasonable given Virginia's contributions as a homemaker and the parties' frugal lifestyle, even if the Social Security portion of the account increase was excluded.
Analysis:
This case significantly clarifies the classification of income and appreciation generated during a marriage from one spouse's separate property. It firmly establishes that while the underlying separate asset (e.g., a pre-marital pension plan or rental property) retains its non-marital status, the income streams it produces during the marriage are generally treated as marital property. This distinction is crucial for attorneys advising clients on prenuptial agreements, highlighting the need for explicit language to address not only existing assets but also future income and appreciation if the intent is to keep them separate. Furthermore, the court's method for apportioning commingled funds demonstrates a practical approach to untangling marital and non-marital contributions, providing guidance for future cases involving accounts with mixed sources. The affirmation of Social Security benefits as immune from marital division reinforces a clear statutory and precedential boundary.
