Rice v. Rice, No. 2009-SC-000730-DG
on review of COA No. 2008-CA-000715-MR and 2008-CA-000716-MR
Published: Opinion Reversing
The Supreme Court accepted discretionary review to determine whether TC abused its discretion in concluding that debt incurred by husband and adult son without wife’s knowledge was marital property and assigning responsibility for one-half the debt to wife. The CA affirmed, and the Supreme Court reverses.
The parties divorced after 42 years of marriage. The TC held that $6500 in credit card debt was marital and assigned half the debt to each party. The debt was incurred by the parties’ adult son with the husband’s knowledge and permission, but the wife didn’t learn about the debt until the bill collectors began to call. The Court of Appeals affirmed and the Supreme Court accepted discretionary review.
The burden of proving that a debt is marital is upon the party who incurred it and claims that it is marital. The allocation of responsibility for debts acquired during the marriage is reviewed for abuse of discretion.
In Neidlinger v. Neidlinger, 52 S.W.3d 513 (Ky. 2001), the SC explained the four factors to determine the nature of a debt as marital or nonmarital: 1) Was the debt incurred to purchase marital property? 2) Was it necessary to maintain and support the family? 3)What was the extent and participation of each party in incurring or benefitting from the debt? and 4) What are the economic circumstances of the parties after the divorce to allow for payment of the debt.
In this case, the wife was unaware of and did not participate in incurring the debt nor did she have sufficient assets to pay it. The court acknowledged that the husband was attempting to help a financially burdened child, but noted that the law puts the burden of self-support on competent adults. The wife had no legal obligation to pay since she was not a party to the credit card contract. If she could not be required to pay through normal legal process, there were no equitable grounds for a Family Court to require her to pay half of it.
Since none of the Neidlinger factors apply, the TC abused its discretion in finding the debt to be marital and assigning any of it to the wife. Since wife had no legal obligation to support a competent adult child, she may not be required to pay debt incurred for the support without her knowledge, consent and benefit.
Remanded to trial court for proceedings consistent with this opinion.