A dispute over the terms of a prenuptial agreement has resulted in the division of part of a man’s nearly $1 million retirement accounts with his ex-wife. A dissenting judge, however, would not award the wife any portion of the retirement funds.
The day before their wedding in 1996, William Thompson and Lora Wolfram signed a premarital agreement to protect and keep their separate property in case of divorce. When Wolfram filed for divorce in 2016, all of her separate assets and investments listed in the agreement had since been liquidated, transferred into another format or placed in both names.
Thompson’s separate property, however, was still in existence, including his retirement accounts, which were listed only in his name at the time of the parties’ dissolution hearing. His 401(k) and IRA accounts were valued at $994,523.
Both parties disagreed about how to treat the retirement accounts, with Thompson asserting that no part of them was divisible marital property. Wolfram, on the other hand, argued that although the $97,477 starting value of the retirement accounts at the time of marriage should be set aside to Thompson, the remaining value should be considered property of the marriage to be divided equally.
Agreeing with Wolfram, the St. Joseph Superior Court ordered the increase in Thompson’s retirement accounts since the marriage to be split equally between the parties. It thus awarded Thompson $97,477 plus one-half of the appreciation to his retirement accounts and awarded Wolfram the remaining one-half of the appreciation. It likewise scheduled a future hearing to determine the value and distribution of the parties’ pension plans.
In an interlocutory appeal, Thompson argued against the trial court’s ruling in William Thomas Thompson v. Lora Lou Wolfram, 19A-DR-2622, asserting the trial court erred by failing to properly interpret the premarital agreement.
However, the appellate majority concluded that the plain language of the agreement indicated the then-current value of Thompson’s retirement accounts was his separate property. It thus concluded that the trial court correctly found the increase in value from the date of the agreement was marital property subject to division upon divorce.
The majority noted that the retirement accounts as listed on Exhibit A included a specific value as of a certain date, with no provision for how to treat increases in that value through contributions or otherwise. To the extent the specific words used in the agreement create an ambiguity, the majority construed them against the drafter – Thompson, by his counsel.
“The dissent argues this result interjects language that is not in the Agreement. On the contrary, the decision is firmly grounded in the actual language and organization of the Agreement,” Judge Margaret Robb wrote for the majority, joined by Judge Nancy Vaidik.
“I must diverge from the majority’s reasoning because I believe the plain language of the Agreement dictates that Thompson’s Retirement Accounts and any contributions and earnings throughout the duration of the marriage must remain as his separate property in their entirety in order to maintain the integrity of the Agreement and uphold the intention of the parties,” Judge Melissa May wrote in dissent. “To interject language that is simply not present into the Agreement controverts not only the intent of the parties but well-established contract law. Based thereon, I respectfully dissent.”