ILNews

Court rules on inclusion of inherited property in marital estates

Jennifer Nelson
January 1, 2007
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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.
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  1. Im very happy for you, getting ready to go down that dirt road myself, and im praying for the same outcome, because it IS sometimes in the childs best interest to have visitation with grandparents. Thanks for sharing, needed to hear some positive posts for once.

  2. Been there 4 months with 1 paycheck what can i do

  3. our hoa has not communicated any thing that takes place in their "executive meetings" not executive session. They make decisions in these meetings, do not have an agenda, do not notify association memebers and do not keep general meetings minutes. They do not communicate info of any kind to the member, except annual meeting, nobody attends or votes because they think the board is self serving. They keep a deposit fee from club house rental for inspection after someone uses it, there is no inspection I know becausee I rented it, they did not disclose to members that board memebers would be keeping this money, I know it is only 10 dollars but still it is not their money, they hire from within the board for paid positions, no advertising and no request for bids from anyone else, I atteended last annual meeting, went into executive session to elect officers in that session the president brought up the motion to give the secretary a raise of course they all agreed they hired her in, then the minutes stated that a diffeerent board member motioned to give this raise. This board is very clickish and has done things anyway they pleased for over 5 years, what recourse to members have to make changes in the boards conduct

  4. Where may I find an attorney working Pro Bono? Many issues with divorce, my Disability, distribution of IRA's, property, money's and pressured into agreement by my attorney. Leaving me far less than 5% of all after 15 years of marriage. No money to appeal, disabled living on disability income. Attorney's decision brought forward to judge, no evidence ever to finalize divorce. Just 2 weeks ago. Please help.

  5. For the record no one could answer the equal protection / substantive due process challenge I issued in the first post below. The lawless and accountable only to power bureaucrats never did either. All who interface with the Indiana law examiners or JLAP be warned.

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