Ogle v. Duff, (Tenn.Ct.App, filed May 24, 2017).
The husband and wife were married for approximately 5 ½ years when husband filed a complaint for divorce. The Loudon County trial court granted the parties a divorce, classified the parties assets as separate or marital, and divided the marital estate.
The husband appealed, and among other things, argued that the trial court erred in classifying the increase in value of husband’s premarital individual retirement account (IRA) as marital property. The husband created three individual retirement accounts prior to the marriage. At the time of the marriage the Fidelity IRA contained $118,412 and the account value at the time of trial was $181,628.
The trial court classified the entire appreciation value of the Fidelity IRA as marital property. On appeal husband argued that the trial court erred by classifying the increase in value of the Fidelity IRA as marital property because no contributions were made to the IRA during the marriage and wife did not substantially contribute to the preservation and appreciation of the Fidelity IRA.
The wife testified that she had no involvement with the management of the Fidelity IRA. Examination of the record showed that wife’s involvement with the Fidelity IRA was limited to husband showing wife the account statements to inform her how the account’s balance fluctuated due to market factors. The record contains no evidence establishing nexus between wife’s marital contributions to the household expenses and appreciation in value of the Fidelity IRA. In addition, the court held that the record contained no evidence that husband commingled separate and marital funds with regard to the Fidelity primary IRA.
The Court of Appeals reversed the trial court’s holding classifying the increase in value of the Fidelity IRA as marital property.
Comment: Husband owned the Fidelity IRA prior to the marriage and funded it with premarital assets. The Fidelity IRA was Husband’s separate property under Tenn. Code. Ann. § 36-4-121(b)(2)(A). The appreciation in value of the Fidelity IRA would become marital property only if Wife substantially contributed to its preservation and appreciation. The record failed to support such a conclusion.