Transfer of Real Properties to LLC Did Not Change Their “Separate” Natures Under Premarital Agreement – Published Opinion from Kentucky Court of Appeals

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Herbener v. Herbener

 

Husband held separate property, which he transferred to an LLC, which was owned by Husband and Wife. Wife argued that the transfer of the property to the LLC after the marriage transformed the ownership to Husband and Wife’s concurrent ownership. The Court of Appeals held that concurrent ownership is limited to ownership by people, not by an organization. Thus, the transfer of Husband’s separate property to the LLC was not sufficient to change its character to property concurrently owned by Husband and Wife.

 

Wife claimed an interest in Husband’s separate property because of her efforts and work in them. The Court of Appeals held that she waived any such rights in the premarital agreement, as she specifically waived “any claims for services rendered, work performed, and labor expended.”

 

Wife argued that Family Court abused its discretion by awarding Husband attorney’s fees. The Court of Appeals held that that Family Court did not abuse its discretion in awarding Husband attorney’s fees, because an indemnification provision existed in the premarital agreement, which granted attorney’s fees to a non-prevailing party who made a claim to the prevailing party’s separate property, and Wife made a claim on Husband’s separate property, which did not prevail.

 

Wife argued Family Court abused its discretion by not awarding her 100% of her retirement accounts, because the premarital agreement defined them as separate property. Before trial, the parties stipulated that certain percentages of her retirement account were marital property. There were no conditions to the stipulation, such that it would become moot of the premarital agreement was found to be enforceable. The Court of Appeals held that Family Court divided those accounts as the parties agreed and did not abuse its discretion.

 

Finally, Wife argued that Family Court erred by finding her to be in contempt when she entered the martial residence without notice. Family Court had entered an order permitting Wife peaceful access to the marital residence to retrieve personal property upon twenty-four hours’ notice to Husband’s counsel. Wife entered the marital residence without giving notice. The Court of Appeals held that Wife’s own testimony was sufficient evidence to support a finding of contempt and that Family Court did not abuse its discretion in so finding.

 

Digested by Nathan R. Hardymon