Moore v. Moore

Majority - PER CURIAM

1. No, the entire increased value of Wife's separately owned stock does not automatically become marital property due to Husband's corporate leadership; however, the portion of the increased value attributable to Husband’s undercompensation for his services during the marriage is marital property, but the circuit court failed to properly calculate this amount. The court reasoned that Husband’s efforts in growing SSC were primarily an obligation arising from his fiduciary duty as president to the company's stockholders, not solely "marital labor" that would convert the entire appreciation of Wife's separate property into marital property. However, to the extent Husband was undercompensated for his services, the marital partnership was denied income (which is marital property), thus diverting marital income to increase non-marital assets. In such cases, the marital share of the increased value must be proportionate to the amount of marital effort, or the dollar amount of undercompensation, devoted to its acquisition. The trial court erred by not determining the specific dollar amount of Husband's undercompensation, which is necessary to calculate the marital portion of the stock's increased value. 2. Yes, the income Wife received during the marriage from the Descendant’s Trust and Exempt Trust, for which she was both sole trustee and sole income beneficiary, constitutes marital property. The court cited consistent holdings that income received during the marriage from a party’s separate property is marital property (Kauffman v. Kauffman, 101 S.W.3d 35). Wife, as sole trustee and sole beneficiary, held both legal and equitable title and had an absolute, vested, and irrevocable right to receive the income, which she actually received and reported on her tax returns. This factual scenario is even more compelling than in Moore v. Moore, 111 S.W.3d 530, where trust assets were deemed marital based on a constructive right to demand distribution. 3. No, property acquired with commingled funds loses its non-marital character if the non-marital portion cannot be clearly and convincingly traced; therefore, Wife’s Bank of America checking account (no. 0906) and the Lake Winnebago property acquired from it are marital property, while the New York Life insurance policy and the promissory notes retain their non-marital character. The court explained that once commingling occurs, the party claiming separate property must establish by clear and convincing evidence that an identifiable portion of the funds can be traced to specific non-marital assets. Wife successfully traced the gifted funds used for the New York Life insurance policy premiums by testifying she deposited them into a joint account and promptly wrote a check, satisfying the tracing requirement. Similarly, for the promissory notes, Wife provided seven years of detailed bank records for her investment account, allowing the court to distinguish non-marital and marital portions and trace the loans to her non-marital funds. However, for the Bank of America checking account (no. 0906), Wife deposited both non-marital (gifted/inherited funds, trust income) and marital (paychecks, interest) funds but made no effort to trace or identify the non-marital portion, thus failing to rebut the presumption that the entire account was marital property. Consequently, the Lake Winnebago property, which was acquired from this untraced commingled checking account, also became marital property.