August 2, 2014

Modification of Spousal Support Orders in Colorado Divorces

In many Colorado divorce proceedings, the court will determine that one spouse must provide some form of support to another spouse. Often, this is because one spouse put his or her career or education on hold to care for the marital home, or because the income potential of one spouse is significantly higher than the other spouse.

family-with-baby-4-1046983-m.jpgHowever, it is important to know that even when a Colorado family court judge hands down a final order in a divorce proceeding, that order is not necessarily permanent. Almost all orders can be modified under certain circumstances, when required conditions are met. This is also true of spousal support orders.

Modifying a Spousal Support Order in Colorado

Spousal support orders, or spousal maintenance orders, can be modified in some instances. However, there is no hard and fast rule for when modification is appropriate. Instead, it is left up to the courts to determine when a modification of a spousal maintenance order is proper.

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June 23, 2014

What Constitutes Marital Property in Colorado?

When a marriage comes to an end, there must be a division of the assets that have been accumulated during the marriage. Generally speaking, states take one of two approaches when dealing with the division of marital assets. The more common of the approaches, and the approach taken by the state of Colorado, is "equitable distribution."

tracks-in-field-1435694-m.jpgThe concept of equitable distribution is exactly what it sounds like. The property in a marriage is not divided equally between the parties but in a manner that is fair, given a number of different factors. Before a court gets to the division of marital assets, however, the court must first determine what constitutes a marital asset and what is the individual property of the parties.

Marital Assets in Colorado

In Colorado, the general rule is that property owned by either party before entering into the marriage remains the individual property of that party. All jointly held property is marital property. In addition, even an increase of value in individual property during the marriage can be considered marital property, depending on the circumstances.

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June 9, 2014

Colorado Custody And Relocation With Children (Part 1)

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Though we can all look back to a time when people were born and raised in one town or one state, the reality is that today's society is both national and transient in nature. People work for national companies, with multiple locations. Job transfers to new areas of the country are a fact of modern day employment and the 21st century economy. People no longer stay put in one location. Aside from employment situations, people with children may have other reasons to move from Colorado, such as acceptance into an out of state university, military reassignment, or a desire to just be closer to a family support network somewhere else. When families or couples are together or intact, these moves are just part of life and everyone jointly rolls with the changes to come. However, things can be entirely different, and moving can be much more difficult, for people either going through an initial Colorado custody or divorce case, or those wanting to move at some point after final orders are entered. As a basic premise, one must keep in mind that obtaining court permission to move pre-decree or pre-final orders can be a much easier proposition than seeking to move at some point in the future after the initial phase of a case is done.

Prior to the entry of final orders in a Colorado custody case, or divorce with children, both parents have equal rights to children and there is no specific law, per se, that prohibits one party from just packing up and moving with the children. However, once a family law case involving children is filed, Colorado statute, either Colorado Revised Statutes section 14-10-107 or 14-10-123, precludes people from leaving the state with the children while the case is pending, absent agreement from the other party or an order of the court. If a case has not yet been filed and one parent moves from Colorado with the children, there is no statutory violation under sections 107 or 123. That being said, our courts, depending on the circumstances, have the power to order the party who left with the children prior to a case being filed to return them to Colorado. This might occur in situations in which a party just left Colorado with the children, absent an agreement or notice to the other party, and the other party timely files an emergency motion requesting their return. In such instances, the court may look at how long the party and children have been gone prior to filing, whether the other party knew of their whereabouts, or other logical factors tying into whether it is in the children's best interest to come back.

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May 21, 2014

DENVER DIVORCE AND "DISCOVERY" (Part 2)

Earlier this month, we posted the first part of this article, setting for the basics of what Denver area family law attorneys call "discovery." As previously indicated, discovery is generally issued in divorce, custody, or child support cases when one side believes more information is needed. This can include a heightened request for documents, generally financial in nature, or requests for questions to be answered, whether of a child related or financial nature. Discovery in a family law case will generally entail interrogatories (questions to be answered) or requests for production of documents. Your attorney can assist you with determining whether the specific facts and circumstances of your case warrant, or necessitate, the issuance of discovery.

Some examples of when discovery might be needed would be in a situation in which the wife has handled all of the family finances or, perhaps owns a business. In such an instance the husband might be in the proverbial dark as relates to the family finances, past or present, and may be in need of further information for purposes of assessing a divorce settlement or preparing for court. Interrogatories may be a useful tool for purposes of ascertaining the other side's position as relates to custody issues, or perhaps for purposes of boxing them into specific written answers which can be used in court. As indicated in the prior posting on this subject, when one side issues formal discovery, it is extremely likely that the other side will do the same. Set forth below are some common rules or pointers for both issuing discovery, as well as responding to it.

1. Pursuant to the Colorado Rules of Civil Procedure, discovery must be issued 63 days before a hearing. Generally, this would be the final divorce or custody hearing. In some instances, there may be interim hearings set, such as a temporary orders hearing. Discovery can be issued less than 63 days before these interim hearings, but one must be aware of that 63rd day prior to the final disposition of the case. Though courts can sometimes be flexible or lenient with deadlines in a family law case, the technical rule would be that discovery issued within that 63 days is issued improperly. When faced with improperly issued discovery, one should look at filing an objection to the request within the time frame allotted.

2. Discovery may not be issued prior to the initial status conference in any case. Pursuant to C.R.C.P. Rule 16.2, parties must first attend the mandatory touch base conference with the court prior to issuing discovery. Some counties may even issue case management orders indicating that permission must be sought from the court prior to issuing discovery. Parties should be aware of the provisions set forth in their case management orders. From time to time, we do even see attorneys issuing discovery early, or late. In those instances, and objection is also appropriate.

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May 5, 2014

COLORADO DIVORCE AND FILING FOR BANKRUPTCY (PART 2)

wedding-rings---african-american-1384052-m.jpgThe first part of this discussion on bankruptcy gave an overview of the bankruptcy process and how it applied to couples who were still married. The second part will discuss the impact of bankruptcy when a couple separates or divorces.

What Happens If a Couple Separates?

In some respects, if a couple separates but remains married, the effect of one spouse filing for bankruptcy is not much different than if they lived together. Assuming the debtor spouse filed individually, the nonfiling spouse might find that certain marital property was considered part of the bankruptcy estate. While the debtor spouse could wipe away a substantial portion of his or her debts, the nonfiling spouse would still be responsible for his or her separate debts.

The above may depend upon how long the couple has been living apart. If the debtor spouse waits several years after the separation to file for bankruptcy, it is more likely that the bankruptcy court and trustee will view the nonfiling spouse's property as separate property, not marital property that is part of the bankruptcy estate.

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April 25, 2014

COLORADO DIVORCE AND FILING FOR BANKRUPTCY (PART 1)

wedding-ring-1415307-m.jpgWhen Denver couples divorce, few anticipate that one of the parties will file for bankruptcy, or that the bankruptcy could have such an impact on both of their lives. That is because there is a lot of confusion about bankruptcy in general: who applies for bankruptcy, what it involves, and its long-term impact.

This blog will look at bankruptcy as it relates to Denver couples who separate and divorce in two parts. The first part will discuss bankruptcy in general, and what happens when one member of a still-married couple files for bankruptcy. The second part will discuss potential problems a couple encounters when they separate and one party files for bankruptcy, or when one party files during or after divorce proceedings.

What Is Bankruptcy?

When individuals or couples file for bankruptcy, it is usually because they are looking to clear away debt. Their house might be "underwater" -- meaning it is worth less than they owe on their mortgage -- and they may have several large debts, such as for credit cards. In these situations, creditors will act aggressively to either pursue the debt or, if applicable, to foreclose or repossess the property. A family's lives might be filled with threatening phone calls and letters. People in this situation typically file for bankruptcy because they have no other choice: they cannot make a deal with the credit card companies or afford to make their current mortgage payments.

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April 14, 2014

DENVER DIVORCE AND "DISCOVERY" (Part 1)

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In any Denver area divorce or custody case, each side is going to be required to complete and exchange regular financial disclosures pursuant to the Colorado Rules of Civil Procedure, Rule 16.2. Normal financial disclosures will include drafting what is called a "Sworn Financial Statement," which is a document essentially setting forth a party's income, assets, debts, and expenses. In addition to the Sworn Financial Statement, parties will also be required to provide various other documents, such as the last 3 year's tax returns, last 3 month's pay stubs, and current bank, credit card, insurance, retirement, and various other financial statements. The purpose behind this exchange to make sure that each party has the financial information he or she needs to make assessements as to various financial issues, whether income related to child support or alimony, or what property there is in a divorce case and how it will be divided.

The normal C.R.C.P. Rule 16.2 financial disclosures tell part of the picture, but sometimes don't give enough information for people to make informed decisions or prepare adequately for a court hearing. As such, the Rules of Civil Procedure also authorize various other mechanisms for gathering information from the other party. Specifically, there are various rules which allow depositions, requests for admissions or inspection, interrogatories, and requests for production of documents. In general, this body of requests that can be made is called "discovery." As Denver area divorce and family law attorneys we generally see the "discovery" issued, or received, in the form of the the latter two: interrogatories and requests for production of documents. In theory, discovery should be issued in instances when the financial disclosures just don't tell enough, or more information is sought, such as might relate to the children or job search efforts. Other instances in which our attorneys might issue discovery might be when the other party is self employed or owns an interest in a business, or perhaps has been the one who primarily, or solely, dealt with the parties' finances.

Discovery can be a useful tool in both a divorce or custody case. As a general rule of thumb, and keeping client funds and costs in mind, discovery should only be issued when needed. Issuing and responding to discovery bring certain additional costs and challenges. Sadly, there are attorneys out there who issue it "just because" or as a matter of course. In these instances, there is not much one can do, as each party has the right to request more information. Inevitably, when one party issues discovery, the other side will almost certainly return the favor. Though this might sound childish, the legal world can be very tit-for-tat.

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March 28, 2014

COLORADO CHILD SUPPORT AND DAY CARE EXPENSES

Over the course of the last few decades, it has become more common place for both mothers and fathers, whether married or just parents of a child or children, to work. In fact, Colorado statute related to child support presupposes that both parents work and creates a duty, absent an exception, for each parent to be employed full time to the best of his or her abilities. In any two-income, intact household with little children, the reality is that some sort of child care will be needed for both parties to work, unless of course they work opposite schedules and never see each other. When a family unit splits up and a divorce or custody case is filed, the need for day care doesn't go away. Fortunately, C.R.S. 14-10-115, the main statutory section related to Colorado child support, sets forth certain provisions regarding day care expenses and how such will be paid among the parties.

C.R.S. 14-10-115(9) indicates that the cost of work related, education related, and job search related child care incurred for a child of the case shall be split among the parties proportionate to their gross incomes. Thus, if there is $1000 per month incurred for day care, and mother makes $100,000 per year and father makes $50,000 per year, statute would have mother paying approximately two-thirds of the monthly child care obligation and father paying approximately one-third. Statute does not make specific mention as to which party is paying the actual cost directly to the child care provider, nor preclude both parties from contributing directly to the provider. Likewise, statute does not necessarily indicate that the parties even have to use the same daycare. It just indicates that costs shall be split proportionate to adjusted gross incomes of the parties.

For purposes of minimize conflict related to payment of or reimbursement for child care, C.R.S. 14-10-115(9) also indicates that the child care costs incurred for any of the three endeavors shall be "added to the basic support obligation." This is generally accomplished by adding the monthly daycare figure into the child support worksheet, or software used for calculating the monthly child support amount. The software used by Colorado family law attorneys will take the monthly child care amount, or amounts, incurred, and apportion it proportionately to the parties' incomes listed on the child support worksheet. The actual monthly child support figure shall then go up or down according to whom is paying what amount for daycare. For example, let's say that a monthly child support obligation of $500 exisits with mother paying father. Let's say that no daycare has been factored in to arrive at that calculation. Due to changes in the parties' schedules, a need for work related child care arises to the tune of $1000 per month. Using the same family set forth in the paragraph above, lets say father, making $50,000 per year, or 1/3 of the combined income, is the one who pays the actual funds to the provider. In this instance, the approximately $667 per month of the day care costs which are allocatable to mother would be added to the $500 child support figure and mother would then be required to pay approximately $1167 per month in child support. Conversely, if mother were paying the actual child care to the provider, the child support owed to father should, in theory, go down by roughly $333 per month. These are approximate figures and do not factor in various adjustments or an adjustment pursuant to statute based on the federal income tax credit for child support.

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March 9, 2014

Will Amendment 64 Affect Colorado Child Custody Cases?

flowering-cannabis-plants---hydroponics-indoors-1431036-m.jpgAs most Colorado residents know, recreational marijuana use was approved via Amendment 64 last fall. The status of marijuana in noncriminal matters, however, remains ambiguous. How will Amendment 64 be implemented? A task force was set up to recommend positions that lawmakers should take about marijuana regulation. The force did not offer a recommendation about how marijuana use should be handled in a child custody case. This could prove problematic in certain cases, but for the most part child custody cases will continue to function as before.

If a parent is not participating wisely in parenting a child, his or her poor decisions will affect the custody arrangements made by the court irrespective of whether marijuana use has influenced those decisions. For example, if a father is too busy with a grow operation and getting high to make sure a child is getting to school or taking his or her medications, his parenting decisions will be scrutinized irrespective of marijuana's legality.

Medicinal marijuana has actually been an issue in family law cases for several years. Many parents have reported another parent's marijuana use to the court in order to get the second parent in trouble. It seems clear that many people do feel marijuana use by a parent is more of a problem than drinking a glass of wine or smoking a cigarette, even though marijuana is now legal. Denver Judge Karen Ashby has noted that medical marijuana has been treated no differently over time than other substances. A parent who smokes a joint after dinner may not be treated differently than a parent who drinks a glass of wine over dinner. Both marijuana and alcohol are likely to be considered on a case-by-case basis now that both are legal substances.

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February 16, 2014

Colorado Divorce and Income Tax Ramifications

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A Colorado divorce case can have many facets to it, whether financial or child related. The financial aspects of a divorce case can include property division, alimony (properly termed "maintenance"), and child support. With those financial aspects come various nuances and intricacies of which your expercienced Colorado family law attorney should be aware. One category of nuances tied into the financial aspects of a divorce case relates to taxes.

Most Denver area divorce attorneys have a basic understanding or knowledge of tax implications tied into a divorce case. Because the Internal Revenue Code is a volumious and shifting literary compilation, most family law attorneys are hesitant to give concrete tax "advice" to their clients. That does not mean that we cannot import general tax information or knowledge to our clients with the caveat of, "you should follow up with an accountant to be certain." In essence, family law attorneys are not tax experts. Despite the lack of expertise as relates to taxes, set forth below are some of the basic topics in which tax issues can arise in a Colorado divorce case and basic information related to such.

MAINTENANCE:

"Maintenance" is the proper term for what people might often call alimony in Colorado. Alimony is essentially spousal support. Colorado statute and case law indicate that depending upon financial circumstances, one spouse may have a duty to financially support the other, for a certain period of time, during and after a divorce case. The issue of taxes arises in an alimoy situation in that the Internal Revenue Code allows the party paying alimony to deduct the payments he or she makes from his or her income on the tax return. This can include temporary maintenance paid while a divorce case is pending, maintenance paid after the divorce is done, or sometimes "unallocated" support that is not necessarily defined, so long as that "unallocated" support is not classified as child support. When one is in an alimony paying situation, it becomes important to speak with a learned accountant to find out specifically your rights, obligations, and what documentation you may need, from an IRS stand point, to be able to claim the deduction. An accountant can also strategize with you in terms of making sure you handle your tax affairs in proper fashion as relates to alimony. The tax code is tricky and subtle deviations in how you pay or what you pay can have an effect. For example, the IRS may allow you to deduct the $2000 in alimony you pay on a monthly or "periodic" basis, but might disallow the deduction if you pre-pay for the year in a lump sum. The primary point is that as an alimony payor, you need to be informed as to the tax benefits and consequences tied into your court orders.

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February 4, 2014

MEDIATION AND YOUR DENVER AREA FAMILY LAW CASE

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As family law attorneys in the Denver area, the lawyers at Plog & Stein are asked many questions on a daily basis. A fairly common subject raised by both current and potential clients is mediation. The questions we are asked vary and can be as simple as "what is mediation?" The reality is that though most people are familiar with the term, there are many misconceptions about mediation, how mediation ties into divorce and custody cases, the role of the mediator, and the end result of the process. As a large percentage of the Denver area metropolitan courts require mediation, our attorneys assist our clients through the process on a regular basis.

The first step in understanding mediation is knowing what exactly mediation is and what it entails. Mediation is a process by which two parties to a case meet with a neutral, third person, whose sole function is to assist them in arriving at an agreement. The mediation process will generally entail the parties meeting with the mediator together, or in separate rooms, letting the mediator know each's position on whatever issues need to be addressed, and then letting the mediator do his or her work in terms of trying to find compromise or middle ground between them. If the parties are able to find that common ground, the next step is generally to have the mediator, or the attorneys, put the agreement down in writing, preferably in a legally cognizable format, for signatures and submission to the court. Though this explanation is somewhat simplistic, it is an accurate representation of what mediation is and how it is conducted.

Beyond explanation of what mediation is, or entails, there are many finer points that the general public is just not aware of. Below, I will convey those finer points with the hope that a broader understanding is obtained by the reader.

1. Mediation is not a replacement for the court process. Often times, people will ask whether they can go to mediation in lieu of filing a court case. Mediation can be conducted before a case is filed, or during the court process. However, for any agreements arrived at in mediation to be binding and enforceable, a court case will still need to be filed. Thus, parties to a divorce may wish to mediate prior to filing a case, but will ultimately need to get that case filed before any agreements can become enforceable court orders. There is nothing precluding people from mediating prior to the filing of a case and submitting their agreement(s) with the initial filing. Generally, mediation occurs after a case is filed.

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January 25, 2014

Is Sick Leave Considered Marital Property in Colorado?

summer-beach-1270002-m.jpgThe Colorado Supreme Court recently decided an interesting issue for the first time. It looked at whether accrued vacation and sick leave is considered marital property during a divorce. In the case a husband and wife petitioned for divorce in 2007. The trial court divided the husband's accrued unused vacation and sick leave, construing it as marital property.

The wife had submitted an exhibit during the divorce at the bottom of which she noted her estimate that the husband had accrued $23,000 worth of vacation and sick leave. The wife stated she would not ask for half of this sum if she could move to Florida with their kids. If she moved to Florida, she would leave the amount for the husband to use for visitation with the kids.

The court calculated that the husband had 452 hours of leave and sick time, which was worth $51.40 per hour or $23,232.80 in total. The husband's pay stub did not indicate whether the accrued leave had a cash value. However, the husband was entitled to payment of the accrued leave if his job was terminated.

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December 25, 2013

How Business Interests Are Divided in Colorado Divorce Cases

oil-pumps-752980-m.jpgSometimes the division of property in a Colorado divorce is relatively straightforward, but it can become much more complex if one or both partners owns a business or is a partner in a business. Dividing a business or partnership interest during a divorce may be a difficult valuation that falls within a trial judge's discretion. The price stated in a buy-sell agreement is not conclusive. Partnership agreements are not conclusive either.

A Colorado judge must do more than look at a balance sheet of assets and liabilities. Rather, the court must consider the context of the agreement. It should also factor in assets, both tangible and intangible. This includes the value of the work in progress, goodwill, and accounts receivable.

If a business share is in a company not traded on the stock market, the value of an ownership interest can be hard to measure fairly. However, a "marketability discount "can adjust the value of shares downward. A marketability discount is an amount that is deducted from an equity interest to reflect the lack of a ready trading market for shares. The propriety of using a marketability discount was decided in a 2010 Colorado Supreme Court case.

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December 5, 2013

COLORADO CHILD SUPPORT: 2014 CHANGES

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As 2013 draws to a close, Denver area divorce and custody attorneys know that various changes are coming to Colorado statute in 2014, that relate to many aspects of family law, including statute related to child support. The general child support statute is set forth in Colorado Revised Statutes section 14-10-115. C.R.S. 14-10-115 covers the majority of topics related to the calculation of child support, specific dollar amounts owed, definitions of income, and other specifics on the subject. Commencing January 1, 2014, certain changes, some significant, will come into play which will likely affect parties with child support cases moving forward. Perhaps the most significant change relates to the restructuring in the acutal guidelines set forth in the statute in terms of what should be paid based on income levels.

Colorado child support is calculated based on a formula. The primary factors for establishing child support are the incomes of the parties, the number of children, the amount of overnight parenting time spent with the children, each year, by the non-custodial parent, day care costs, if any, and health insurance costs, if any. The numbers leading to a child support calculation are plugged into software, which then generates a monthly child support amount, based on a statutory formula. C.R.S. 14-10-115 contains a basic table setting forth the amount the legislature has deemed needed to support a child, or children, depending upon the parties' combined monthly gross incomes. This figure is titled the "basic support obligation" and is not the actual monthly child support amount owed. Without any adjustments, which will not be discussed in this posting, the software would, in essence, divide the monthly support obligation between the parties proportionate to their incomes, with the presumption that the payor is paying his or her proportionate share to the custodial parent.

Current support obligation figures were established commencing 2008. On the low end of the table or chart, parties with a combined monthly gross income of $850 would have a combined support obligation of $184 for one child. On the high end of the current table, the maximum combined monthly income set forth is $20,000 per month and the combined support obligation for one child would be $1858. The 2014 changes not only increase or decrease the combined support obligation, depending on the combined income and number of children, but also raises the upper most limit of the guideline combined income amount to $30,000 per month between the parties. This is significant in that some courts in the Denver metropolitan area have taken a position that they are not generally willing to exceed the $20,000 maximum guideline income amount for calculating child support. Thus, despite case law on the subject, there has been a gray area as relates to calculating child support for families making over $240,000 per year. That figure will now change to $360,000 per year. As such, persons with significant income over $240,000 will now lose any gray area as to what child support should be, up to the new $360,000 threshold. This change makes sense in that some sort of standard should be in place which limits potential litigation over what child support amount is fair for higher earning families. Perhaps such a change was long overdue.

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November 19, 2013

Gifts and Property Division During a Colorado Divorce

white-house-1426634-m.jpgFrom the wedding and throughout the course of a marriage, a Colorado couple may receive many gifts, including gifts of real estate or significant amounts of money. If the couple gets divorced, one of the major controversies of the divorce may be who gets the property that was gifted. Is it separate property belonging to the partner who is friends or family with the gift giver? Or is it property to which both partners have a right? How does property division work in the case of gifts? Disposition of property in Colorado is covered by Colorado Revised Statute 14-10-113 and case law.

In a recent case, a husband appealed as to the property distribution ordered in connection with his divorce, among other things. One major piece of property that caused contention was the marital home. The couple had purchased the martial home together as joint property while they were married. Years later, the wife's mother had paid off the mortgage by making a direct transfer to the lender. The couple was still married at the time. Soon after she paid the mortgage, the mother signed a trust instrument that described all her gifts to the wife as advances on her inheritance.

The mother's trust instrument did not mention the husband. At trial, the wife testified the mother did not intend the mortgage payments as a gift to the marriage, but just to her. The husband testified both the wife and mother had told him it was a gift for them both. The trial court classified the home as the wife's separate property because her mother had contributed to the mortgage. It found that the funds used to pay the mortgage were treated as part of the wife's inheritance, which would be separate property.

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