Thursday, September 24, 2020
From Fleming & Curti PLC:
The South Dakota Supreme Court explains the law
In the trial court and on appeal, Aren argued that the gift had been to the couple, not primarily to Matt. That was evidenced by the fact that they signed the contract as a couple, and they both took on responsibility for the loan. Besides, she pointed out, she had actually worked on the farm alongside Matt, and it was clearly marital property.
The state’s high court agreed with Aren. A gift to a married couple, ruled the justices, is just that: a gift to both of them. The nature of such a gift should be judged at the time of the transfer, not by later reengineering. Even though Dennis now maintains that he primarily intended to benefit Matt, at the time the transaction was with both of them. Plus they took title in their joint names.
That means that the property is now owned by the two of them equally. And even if that were not true, the fact that Aren worked on the land with her husband, and made payments on the note along with him, would have made at least some of the farm joint property anyway. But the court wanted to be clear: there’s no need to get to the fact that Aren contributed to management of the farm, since her name is on the title. Field v. Field, September 9, 2020.
Does this apply in a community property state?
The Field case, though coming from a different state (and a non-community property state, at that) would probably be persuasive in Arizona. Note that the South Dakota Supreme Court decision doesn’t actually rely on the common law concept of marital property (their analogue for our community property rules). It focuses on how the transfer was made, and what the documents say.
So if Dennis, Matt and Aren had all lived and farmed in Arizona, the result would likely have been the same. Except, of course, that Matt and Aren would probably have taken title to the farm as “community property with right of survivorship.” But that’s a story for another day.
Read more here.