Can Debt For An Adult Child's College Expenses Be Considered Marital Property?
Posted By Posted by Damien McKinney on Apr 2, 2014 6:30am PDT || Apr 2, 2014
A recent second district court of appeals case found that debt the Husband incurred on behalf of an adult child during the marriage was considered marital property. In Wagner v. Wagner, the Husband charged approximately $13,500.00 on a credit card for the parties adult child’s college expenses. The charges were made 5 days before the Wife filed her petition for dissolution of marriage. The trial court found that this was the Husband’s non-marital property. However, the appellate court overturned the trial court’s ruling.
Marital liabilities include "liabilities incurred during the marriage, individually by either spouse or jointly by them." § 61.075(6)(a)(1)(a), Fla. Stat. (2011). Unless the parties have a valid separation agreement, the date of the filing of the petition for dissolution is the cut-off date for determining whether assets and liabilities are classified as marital. See § 61.075(7).
"All assets acquired and liabilities incurred by either spouse subsequent to the date of the marriage and not specifically established as nonmarital assets or liabilities are presumed to be marital assets and liabilities." § 61.075(8). To overcome the presumption, a party must show "that the assets and liabilities are nonmarital assets and liabilities."
Because the parties did not enter into a marital settlement agreement, the pertinent date to determine whether assets and liabilities are marital or nonmarital is June 27, 2011, when the Wife filed the petition for dissolution. The Husband charged - 4 - the college expenses on June 22 and 23, 2011, before the Wife filed the petition; thus, the credit card charges are presumed to be a marital debt. See § 61.075(7), (8). The Wife did not make a showing that the college charges were nonmarital liabilities.
The trial court may consider a party's intentional waste or depletion of marital assets to do equity and justice between the parties. The trial court did not make a finding of waste of marital assets to justify an unequal distribution. In fact, the trial court “hope[d] that both parenting partners would take part in funding the Davidson College expenses outside of Court.” Therefore, the debt was considered to be a marital debt. The valuation of assets and determination of marital versus non-marital assets can be complicated. It is best that you contact your expert family law attorney to discuss these issues in detail in order to adequately protect your interest in marital property.