CLASSIFICATION OF SEPARATE PROPERTY AND MARITAL PROPERTY IN A UTAH DIVORCE—Introduction: Three Circumstances Under Which Presumption of Retention of Separate Property Can Be Overcome
By: Zachary C. Lindley, Esq.
Gallian Welker & Beckstrom, L.C., St. George, Utah
Undoubtedly, property division is at the crux of all drawn-out and contentious divorces. The classification of separate and marital property raises both traditional and nuanced issues, while never arriving at a hard-and-fast rule on how to make a determination as to when otherwise separate property becomes marital property. This blog post, followed by its three corresponding segments, is intended to provide the reader with a foundation as to how courts in Utah have classified separate and marital property under a diverse set of facts.
During a property division in Utah at the dissolution of a marriage, there is an “overriding consideration…that the ultimate division be equitable—that property be fairly divided between the parties.”[i] When so dividing property, there is a general presumption that each party retain his or her separate property—“married persons have a right to separately own and enjoy property, and that right does not dissipate upon divorce.”[ii] Marital property ordinarily includes all property acquired during the marriage, while separate property typically includes premarital property, gifts, inheritances, which also includes any appreciation that may accrue during the marriage.[iii] However, Utah courts have consistently found otherwise separate property is “not totally beyond the court’s reach.”[iv]
There are three circumstances identified in Utah under which the presumption of retention of separate property can be overcome: (1) the separate property has been inextricably commingled so as to lose separate property character; (2) the other spouse has augmented, maintained, or protected the separate property; and (3) in extraordinary circumstances when equity so demands.[v] Courts are given broad discretion in dividing property upon dissolution of the marriage.[vi]
In the following three (3) segments to this introductory blog post, we will explore each of the aforementioned exceptions to presumption of retention of separate property—namely, (1) commingling, (2) augmentation or maintenance, and (3) extraordinary circumstances.
[i] Granger v. Granger, 2016 UT App 117, ¶15, 374 P.3d 1043 (internal citations and quotations omitted); see also Utah Code Ann. § 30-3-5.
[ii] See Lindsey v. Lindsey, 2017 UT App 38, ¶32, 392 P.3d 968 (internal citations and quotations omitted).
[iii] Id. at ¶31.
[iv] See Sandusky v. Sandusky, 2018 UT App 34, ¶12, 417 P.3d 634.
[v] See Dunn v. Dunn, 802 P.2d 1314, 1320 (Utah Ct.App 1990); see also Mortensen v. Mortensen, 760 P.2d 304, 308 (Utah 1988).
[vi] See, e.g., Clarke v. Clarke, 2012 UT App 328, 292 P.3d 76; Elman v. Elman, 2002 UT App 83, 45 P.3d 176.