Family Law Blog: Trial Court Erred When it Essentially Double Charged Wife

Case: Mary Ann Crider v. Robert Crider
by Mike Kohlhaas, Bingham Greenebaum Doll

HELD: Trial court erred when it essentially “double-charged” Wife for funds she withdrew from her IRA during the pendency of dissolution proceedings, and then used those funds to help her daughter purchase real estate.

HELD: Trial court erred when it failed to credit Wife for paying a jointly-owed IRS liability.

FACTS AND PROCEDURAL HISTORY:
Husband and Wife married in 1989, had no children together, and separated with Husband’s petition filed in April, 2012. In November, 2013, the trial court held a final hearing, after which it concluded that Wife should be “credited” for a $75,000 inheritance, but the remaining marital property should be split 50/50 between the parties.

In her appeal, Wife argued that the trial court’s division erroneously included in her share of the marital estate certain Florida real estate, and failed to credit Wife for paying an IRS assessment that arose from a joint marital tax return, and which Wife paid in full after the date that Husband initiated divorce proceedings.

With respect to the Florida property, the record established that, as of Husband’s April 2012 filing, Wife had about $175,000 in her IRA. The following month, Wife withdrew $14,000 from the IRA, gave it to her daughter, and then the daughter used that money and a mortgage co-signed by Wife to buy real estate in Florida. In its Decree, the trial court concluded that the Florida real estate was actually owned by Wife, and it assigned to Wife’s share of the marital estate BOTH the Florida real estate, AND Wife’s date of filing $175,000 IRA balance. The Court of Appeals concluded this was error. The trial court was correct to assign Wife the IRA at $175,000, but it was double-counting to charge, in addition, Wife for a post-filing real estate acquisition that was acquired in part with those same funds.

With respect to the IRS debt, the evidence was uncontroverted that the parties’ joint, marital 2010 tax return resulted in an additional assessment against the parties jointly. Wife received notice of same several months after Husband filed, and Wife promptly paid it from her funds. Since that obligation was plainly a marital liability, Wife was entitled to credit in the Decree for paying it.

The trial court’s Decree was reversed and remanded for further proceedings to remove the Florida property from the division between the parties, and to credit Wife for paying the parties’ marital IRS liability.

To view the text of this opinion in its entirety, click here: Mary Ann Crider v. Robert Crider

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James A. Reed and Michael R. Kohlhaas of Bingham Greenebaum Doll represent clients in a wide spectrum of relationship transition and wealth planning matters, including premarital agreements, estate planning, cohabitation, separation, divorce (especially involving high net worth individuals and/or complex asset issues), custody, parenting arrangements, adoption, and domestic partnerships. Bingham Greenebaum Doll, a multidisciplinary law firm serving regional, national, and international clients, is the fourth-largest law firm in Indiana. The firm’s main practices include corporate, property, litigation, labor, government law, and personal services law. Visit the firm’s website at www.bgdlegal.com.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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