Support During Marriage Was One Factor of Substantial Contribution When It Resulted in Preservation of Asset

Wade v. Wade, 897 S.W.2d 702 (Tenn. Ct. App. 1994)

Nonowner Spouse’s Support During Marriage Was One Factor of “Substantial Contribution” When It Resulted in Preservation of Asset

This 1994 case involved a number of different pieces of property which the court was required to classify as separate or marital.  These had been owned by the husband prior to the marriage, and the husband argued that they had remained his separate property.

One critical factor was the fact that, after being married in Tennessee, the parties had moved to the Philippines, since the wife had been offered a position in a school there.  Initially, the husband was not employed in the Philippines, and the couple lived on the wife’s earnings.  Critically, the appeals court noted that the husband was not required to use any of his separate assets for living expenses.  Therefore, the court concluded, the assets continued to appreciate due to the wife’s support.  For this reason, the assets were properly considered marital in nature.

The court did concede that the case was unusual, since the wife did not make any contribution directly attributable to the assets in question.  However, the court distinguished prior cases such as  Sherrill v. Sherrill, 831 S.W.2d 293 (Tenn. App. 1992) on the grounds that the wife’s support had substantially contributed to the preservation of the asset.

The court also noted that, later in the marriage, the wife had worked for a brokerage firm, and during this time, she had made trades of the stocks in question and advised the husband when to buy, sell, and hold.

The court also addressed the husband’s interest in a business partnership in which he had invested after the marriage.  The funds for this investment had been from the sale of a residence he had owned prior to the marriage, and those funds had been deposited into the husband’s separate bank account.  However, the appeals court, after reviewing the record, concluded that the husband had not adequately traced these funds, and that the record supported the lower court’s conclusion that the asset was marital property.

This post is part of a series, Appreciation of Separate Property: The Forensic Accountant’s Full Employment Act.