ILNews

Court rules on inclusion of inherited property in marital estates

Jennifer Nelson
January 1, 2007
Keywords
Back to TopCommentsE-mailPrintBookmark and Share
The Court of Appeals ruled today on a case of distributing inherited property during dissolution of a marriage, stating property inherited by either party should be included in the marital estate.

In Sharren M. (Garrity) Grathwohl v. Steven T. Garrity, http://www.in.gov/judiciary/opinions/pdf/07300703mpb.pdf the Court of Appeals remanded the case back to the trial court for the purpose of requiring the trial court to include both parties' inherited property in their marital estate, to value the properties, and to issue a new order to redistribute the marital assets accordingly.

In 2003, Sharren Grathwohl and Steven Garrity, who were married at the time, both inherited properties from their mothers. Grathwohl owned her property in Michigan as a joint tenant "with full rights as a survivor," with her son from a previous marriage owning the other half. In 2006, Garrity filed for divorce and testified that both properties should be included in the marital estate, but set off separately to each party. Grathwohl argued her inherited property should not be included because of the joint tenancy with her son. The trial court excluded both properties when dissolving the marriage and dividing the marital estate. The court calculated the net worth of the marital estate at $277,537 and awarded approximately 49 percent to Grathwohl and 51 percent to Garrity.

Grathwohl appealed the ruling, stating the trial court erred in not including Garrity's property in the marital estate and that Garrity had frivolously dissipated marital property prior to the divorce.

The Court of Appeals, citing Indiana Code Section 31-15-7-4(a), states it has been repeatedly held that the statute requires inclusion of all property owned in the marital estate, including inherited properties. It found the trial court erred in excluding the properties of Garrity and Grathwohl. Even though Grathwohl's property includes joint tenancy, the court stated she had the right to enjoy the use of the Michigan property, sell it, or mortgage her interest in it, thus it is sufficient enough to render the property in the marital pot as well.

The trial court didn't include in its decision why it excluded the inherited property in the marital estate, beyond stating it was inherited property. The Court of Appeals is unable to determine the actual total value of the marital estate or the percentages of the estate Garrity and Grathwohl received because the trial court did not assign values to the parties' interests in the inherited properties, despite evidence being presented to support that point.

The Court of Appeals remands to the trial court to include the parties' inherited property interests in the marital estate, to valuate those interests, and to recalculate the division of marital assets accordingly. A footnote to this point states the court cannot address Grathwohl's claim she was entitled to a larger percentage of the estate because it doesn't know what percentage of the marital estate she actually received.

Grathwohl also claimed in her appeal that Garrity frivolously dissipated marital assets prior to the divorce when he purchased a motorcycle, bought Conseco stock that eventually became worthless, and spent money remodeling and repairing the property he inherited from his mother. The court found that Garrity did not dissipate marital assets frivolously because Grathwohl had received half of the profits from the sale of the motorcycle; Garrity couldn't have known that the Conseco stock would become worthless; and remodeling of a home that is considered a marital asset is not wasteful.
ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. He TIL team,please zap this comment too since it was merely marking a scammer and not reflecting on the story. Thanks, happy Monday, keep up the fine work.

  2. You just need my social security number sent to your Gmail account to process then loan, right? Beware scammers indeed.

  3. The appellate court just said doctors can be sued for reporting child abuse. The most dangerous form of child abuse with the highest mortality rate of any form of child abuse (between 6% and 9% according to the below listed studies). Now doctors will be far less likely to report this form of dangerous child abuse in Indiana. If you want to know what this is, google the names Lacey Spears, Julie Conley (and look at what happened when uninformed judges returned that child against medical advice), Hope Ybarra, and Dixie Blanchard. Here is some really good reporting on what this allegation was: http://media.star-telegram.com/Munchausenmoms/ Here are the two research papers: http://www.sciencedirect.com/science/article/pii/0145213487900810 http://www.sciencedirect.com/science/article/pii/S0145213403000309 25% of sibling are dead in that second study. 25%!!! Unbelievable ruling. Chilling. Wrong.

  4. Mr. Levin says that the BMV engaged in misconduct--that the BMV (or, rather, someone in the BMV) knew Indiana motorists were being overcharged fees but did nothing to correct the situation. Such misconduct, whether engaged in by one individual or by a group, is called theft (defined as knowingly or intentionally exerting unauthorized control over the property of another person with the intent to deprive the other person of the property's value or use). Theft is a crime in Indiana (as it still is in most of the civilized world). One wonders, then, why there have been no criminal prosecutions of BMV officials for this theft? Government misconduct doesn't occur in a vacuum. An individual who works for or oversees a government agency is responsible for the misconduct. In this instance, somebody (or somebodies) with the BMV, at some time, knew Indiana motorists were being overcharged. What's more, this person (or these people), even after having the error of their ways pointed out to them, did nothing to fix the problem. Instead, the overcharges continued. Thus, the taxpayers of Indiana are also on the hook for the millions of dollars in attorneys fees (for both sides; the BMV didn't see fit to avail itself of the services of a lawyer employed by the state government) that had to be spent in order to finally convince the BMV that stealing money from Indiana motorists was a bad thing. Given that the BMV official(s) responsible for this crime continued their misconduct, covered it up, and never did anything until the agency reached an agreeable settlement, it seems the statute of limitations for prosecuting these folks has not yet run. I hope our Attorney General is paying attention to this fiasco and is seriously considering prosecution. Indiana, the state that works . . . for thieves.

  5. I'm glad that attorney Carl Hayes, who represented the BMV in this case, is able to say that his client "is pleased to have resolved the issue". Everyone makes mistakes, even bureaucratic behemoths like Indiana's BMV. So to some extent we need to be forgiving of such mistakes. But when those mistakes are going to cost Indiana taxpayers millions of dollars to rectify (because neither plaintiff's counsel nor Mr. Hayes gave freely of their services, and the BMV, being a state-funded agency, relies on taxpayer dollars to pay these attorneys their fees), the agency doesn't have a right to feel "pleased to have resolved the issue". One is left wondering why the BMV feels so pleased with this resolution? The magnitude of the agency's overcharges might suggest to some that, perhaps, these errors were more than mere oversight. Could this be why the agency is so "pleased" with this resolution? Will Indiana motorists ever be assured that the culture of incompetence (if not worse) that the BMV seems to have fostered is no longer the status quo? Or will even more "overcharges" and lawsuits result? It's fairly obvious who is really "pleased to have resolved the issue", and it's not Indiana's taxpayers who are on the hook for the legal fees generated in these cases.

ADVERTISEMENT