Wade v. Wade

• Decision Date: 01 July 2005
• Docket Number: No. 04-045.,04-045.
• Citation: 878 A.2d 303
• Court: Vermont Supreme Court
• Parties: Susan Smith WADE v. Mason D. WADE.

878 A.2d 303

Susan Smith WADE v. Mason D. WADE.

No. 04-045.

Supreme Court of Vermont.

July 1, 2005.

Geoffrey W. Crawford, J.

Brian K. Valentine of Schoenberg & Associates, Burlington, for Plaintiff-Appellee.

Lauren S. Kolitch, Waitsfield, for Defendant-Appellant.

Present: REIBER, C.J., DOOLEY, JOHNSON and SKOGLUND, JJ., and ALLEN, C.J. (Ret.), Specially Assigned. ALLEN, C.J. (Ret.), Specially Assigned.

In this appeal from a final judgment of divorce, husband challenges the family court's exclusion from the marital estate money given to the parties' minor child in accordance with the Vermont Uniform Gifts to Minors Act (VUGMA), 14 V.S.A. §§ 3201-3209. Husband also contests the property division as inequitable because the court awarded nearly ninety percent of the marital property to wife. We affirm.

¶ 2. Husband and wife were married in 1991, had one child together, and separated in 2002. The parties, their daughter, and husband's son from a prior relationship lived in the Town of Waitsfield in a home that wife purchased before the parties married. Since 1985, wife used part of the home to run the Sunshine Montessori School, Inc., a nursery school she founded and continues to operate. Husband has a landscaping business. During the marriage husband also took on seasonal work in the restaurant, construction, and ski industries. Over the last four years, husband earned between $13,000 and $23,000 annually. Wife's income from the Sunshine School averaged $21,824 in 2000-2002.

¶ 3. In 1996, wife received a series of gifts from her mother. She was given title to her mother's home, which wife rented out until 2002 when she sold the property. Wife also received $22,000 in cash and put $40,000 from her mother into a VUGMA account for the parties' minor daughter. The $22,000 gift to wife went into an account in her name only. Wife subsequently exhausted the money in the account by using it to pay for various family expenses. At the time of the divorce hearing, the VUGMA account had a $25,000 balance. Wife testified that she spent approximately $18,000 from the VUGMA account for family expenses, including her own medical expenses.

¶ 4. After wife sold the home her mother gave her in 2002, the parties each received $10,000 from the proceeds. The remaining proceeds of $59,000 were placed into escrow pending distribution in the divorce proceeding. After her mother died, wife used some of her inheritance to purchase a twenty-nine foot sailboat and a catamaran for the family. Husband spent time repairing and maintaining the boats for the family, and used his carpentry and other handyman skills to maintain and improve the parties' residence. The family also owned a camper, and husband held a half interest in a seasonal camp in Rochester, Vermont.

¶ 5. Throughout the marriage, wife paid the mortgage on the marital residence and most of the household expenses. Husband paid half of the household utilities and charged many of his own expenses, and those of his landscaping business, to credit cards. At the time the parties separated, husband had over $23,000 in personal and business credit card debt. Wife's credit card debt was a fraction of husband's. After separating, wife remained in the marital home, and husband moved into a friend's home where he acts as caretaker.

¶ 6. Wife filed for divorce in October 2002. She sought primary custody of the parties' daughter and most of the parties' property, although wife agreed that husband and their daughter should have liberal contact. Husband wanted a shared parenting arrangement—one week every other week—and asked the court to split their property roughly fifty-fifty. Both parties hired expert witnesses to testify about the value of the Sunshine School. It was undisputed that husband's business had no value.

¶ 7. The court issued a written order following a hearing in December 2003. Wife received approximately ninety percent of the marital property, including the parties' home and all of its equity, the catamaran, the camper, and the escrowed proceeds from the sale of her mother's home. The court awarded husband the sailboat, $10,000 from the sale proceeds that he had already received, his interest in the Rochester camp, and his tools. Crediting wife's expert witness, the court found that the Sunshine School, while valuable to wife personally, had no market value. The court also concluded that the VUGMA account was not subject to distribution because it was the property of the parties' daughter. As to parental responsibilities for the minor child, the court adopted the arrangement set forth in the parties' stipulated temporary order, which allowed the child to spend overnights with husband every Wednesday and every other weekend from Friday until Monday morning.

¶ 8. In support of the property award, the court explained that wife had lived in the parties' home since 1985, six years before the parties' married. Wife paid the mortgage and property taxes. She also paid for the parties' two boats and contributed all of her income to other household expenses. The court acknowledged that what money husband earned was spent primarily on the household, but it noted that husband "never earned much in any year." The court found that husband had not "followed a conventional career; instead he has enjoyed the freedom of working on a seasonal basis and taking time when he wishes to work on his own business." The court found that husband could earn more money working a full-time job in construction or some other business if he chose.

¶ 9. In his appeal, husband first claims that the court should have distributed the VUGMA account because it was part of the marital estate. He argues that wife never executed any trust documents to establish an irrevocable account for their daughter, and that she used the money for her own purposes. Therefore, husband contends, the funds in the account are marital property subject to distribution in the divorce. The family court's fact findings on the VUGMA account will stand on appeal if they are supported by any credible evidence in the record. Hayden v. Hayden, 2003 VT 97, ¶ 14, 176 Vt. 52, 838 A.2d 59. We will uphold the court's legal conclusions if supported by the findings. Payrits v. Payrits, 171 Vt. 50, 53, 757 A.2d 469, 472 (2000).

¶ 10. Contrary to husband's claim, establishing a VUGMA does not require the execution of trust documents to make the gift irrevocable. The VUGMA's purpose is to provide a simple procedure for gifting property to minors. See In re Marriage of Hendricks, 681 N.E.2d 777, 781 (Ind.Ct. App.1997) (construing Indiana's Uniform Gifts to Minors Act). For cash gifts, the Act requires only that the donor pay or deliver the money "to a broker or a bank for credit to an account in the name of the donor, another adult person, an adult member of the minor's family, a guardian of the minor or a bank with trust powers, followed, in substance, by the words: `as custodian for (name of minor) under the Vermont Gifts to Minors Act.'" 14 V.S.A. § 3202(a)(3). Once made according to statutory procedures, the gift is irrevocable, and the child possesses an indefeasible interest in the property held in the VUGMA account. Id. § 3203(a); In re Marriage of Hendricks, 681 N.E.2d at 781; In re Marriage of Agostinelli, 250 Ill.App.3d 492, 189 Ill.Dec. 898, 620 N.E.2d 1215, 1220-21 (1993). The account's custodian has authority under the Act to spend "so much of or all the custodial property as the custodian deems advisable for the support, maintenance, education and benefit of the minor." 14 V.S.A. § 3204(b). Because the funds in a VUGMA are the child's property, they are not part of the marital estate subject to equitable distribution in a divorce proceeding. In re Marriage of Agostinelli, 189 Ill.Dec. 898, 620 N.E.2d at 1221.

¶ 11. To prevail on his first claim, therefore, husband must demonstrate that the record lacks evidence supporting the court's finding that the account was created in accordance with the VUGMA. Because the record supports the court's finding, husband's claim must fail. The $40,000 check that wife's mother wrote to fund the account was admitted into evidence. The check was payable to an investment firm and not to wife. On the check, wife's mother wrote the child's name and indicated that it was for a VUGMA account. Wife also introduced the account statements she received as custodian of the VUGMA account. The statements identify the account as a VUGMA account, they name wife as the account's custodian, and they identify the parties' child as the account holder. That evidence, in addition to wife's testimony about the account, provide ample support for the court's findings on this issue.

¶ 12. Wife's alleged misuse of the funds in the account does not transform the child's property into the property of her parents. To the extent that wife violated her obligations as custodian on the account, the VUGMA provides a different remedy in a different forum. The probate court, not the family court, has jurisdiction over VUGMA accounts, 4 V.S.A. § 311; 14 V.S.A. § 3201(4), and it may require the custodian to provide an accounting of all deposits to, and expenditures from, the account. 14 V.S.A. § 3208. The probate court may also remove and replace the custodian for cause, id. § 3207(d), (e), and may hold the custodian liable for losses to the account resulting from intentional wrongdoing, gross negligence or actions taken in bad faith. Id. § 3205(e). The family court correctly decided to exclude the account from the marital estate because it was not marital property, and the court had no jurisdiction over its management in light of the governing statutes.

¶ 13. Husband next argues that the court awarded a disproportionate share of the marital property to wife by ignoring some of the statutory factors in 15 V.S.A. § 751 and giving too much weight to others. Section 751 of Title 15 directs the family court to divide the...