Prenuptial agreement equally divided property acquired during marriage

March 27, 2014 (Press-News.org) In Yarbrough v. Yarbrough, the Court of Civil Appeals of Alabama reversed the trial court's marital property division order in a divorce case, holding that, under the plain language of the parties' prenuptial agreement, the trial court should have equally divided all the property interests acquired by the parties during the marriage, even those acquired by a party individually.

The terms of the prenuptial agreement

The prenup's introductory paragraph contained prefatory language stating that the parties' marriage would not alter their presently existing legal rights to "dispose of their separate estates." The agreement further provided that, in the event of a divorce, death or legal separation, the property listed in an attachment marked as Exhibit A was the wife's property free and clear of claims from the husband, and, likewise, the property listed in an attachment marked as Exhibit B was the husband's property free and clear of claims from the wife. Another paragraph provided that property acquired during the marriage "shall be jointly owned and shall be subject to equal division in the event of divorce or legal separation."

The trial court's order dividing the marital property

The trial court interpreted the agreement to mean that any property that was presently owned when the prenuptial agreement was signed, or later acquired during the marriage by a party individually, would remain part of that party's separate estate upon divorce, death or legal separation. The trial court awarded the husband several vehicles used by the husband for his pool and construction business and at his farm--a Kubota tractor, a John Deere backhoe, and four of the husband's trucks--even though they were purchased during the marriage, on the basis that they were an indivisible part of the husband's separate estate under Exhibit B. The trial court's ruling was based on two factors: first, the husband testified that he individually acquired the vehicles; and, second, the husband's itemized list of his separate assets in Exhibit B included, in part, "Construction, Farm and Shop Equipment," "House," "Shop," "John Deere Loader," and several named vehicles.

The ruling by the Court of Civil Appeals

The Court of Civil Appeals reversed, holding the trial court's order dividing the marital property failed to give effect to the plain language of the parties' agreement. The first part of the agreement, said the court, concerned each party's right to maintain their rights in their respective individual property interests that were in existence at the time of the parties' marriage. This included only those individual property interests itemized in Exhibit A for the wife and in Exhibit B for the husband. Any and all property interests not listed in Exhibit A or Exhibit B that were acquired during the marriage were designated by the parties as jointly owned property under the terms of the agreement, said the court, and were required to be equally divided between them in the divorce. Thus, it was improper for the trial court to award the tractor, the backhoe, and the four trucks to the husband, where he admitted that those vehicles had been purchased during the course of the marriage.

Individuals facing a divorce or other domestic relations proceedings are urged to consult with a competent attorney, experienced in such matters, for the protection of their legal rights.

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