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Characterization of Property in Divorce - Increases in Value of Non-Marital Assets only Marital to Extent of Marital Contributions

Under Missouri Law, certain property is considered to be non-marital, and not part of the division of the marital estate in a divorce proceeding.  Non-marital property includes property:

  1. Acquired before the marriage;
  2. Acquired by gift or inheritance;
  3. Acquired in exchange for property acquired by 1 and 2 above;
  4. Acquired after a decree of legal separation;
  5. excluded by written agreement (pre or post nup)

In the case of an increase in value of a non-marital asset described above, the general rule is that the increase in value is also non-marital.  The exception to the rule occurs when marital assets, including labor or marital income, contribute to the increase in value.  The Court of Appeals has said that marital effort, labor , or services, will entitle a spouse to a proportionate share of the increase in value of the separate property, but only after "comprehensive substantiation", including proof of:

  1. a contribution of substantial services;
  2. a direct correlation between those services and the increase in value;
  3. the amount of the increase in value;
  4. performance of services during the marriage; and
  5. the value of the services, the lack of compensation, or inadequate compensation received.

There must more than just services provided, but a connection between valuable services provided and the increase in value of the asset.  Note that income received during the marriage by either spouse is considered a marital asset, so if any income of either spouse is contributed to the asset, it is considered a marital contribution.  Likewise, in terms of a non-marital business, employment or labor for no or reduced salary is also considered a marital contribution.

 

Mark A. Wortman

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Kansas City family law attorney Mark A. Wortman handles only divorce and family law matters, and practices only in the State of Missouri. Due to this specialty, Mark has handled thousands of Missouri divorce and family cases and has practiced extensi… Read More