Opinion
No. 1-696 / 01-173.
Filed March 13, 2002.
Appeal from the Iowa District Court for Polk County, GEORGE W. BERGESON, Judge.
The respondent appeals various economic provisions of the parties' dissolution decree. AFFIRMED AS MODIFIED AND REMANDED.
Carol L. Coppola, Des Moines, until withdrawal, then Nancy Greening, Des Moines, pro se, appellant.
Peter S. Cannon of Cannon Law Office, Des Moines, for appellee.
Considered by HUITINK, P.J., and ZIMMER and VAITHESWARAN, JJ.
Nancy Greening appeals the alimony and property distribution provisions of her dissolution decree. She contends the district court acted inequitably in refusing to award her any alimony and in refusing to equally divide the parties' assets. We agree. Accordingly, we affirm as modified and remand.
I. Background Facts and Proceedings
Nancy and Dennis Greening married when they were both nineteen, following a year of college. They raised three children, all of whom were adults at the time of these proceedings. The parties remained married for almost thirty-one years.
Their oldest son suffered serious injuries in a car accident and, although he lives independently on a settlement trust, requires assistance from his parents with daily activities.
After the parties married, Dennis earned a college degree while at the same time working for the United States Department of Agriculture. He made approximately $88,000 per year and expected to receive salary increases of 3.8 percent per year. Nancy did not work outside the home until the parties' youngest child began school. She held various part-time secretarial positions for about nine years, then transitioned into full-time employment. At the time of trial, she earned approximately $22,000 per year.
Dennis sought a divorce. Just before trial, Nancy's mother died, leaving her $50,000 from a life insurance policy and a $40,000 distribution from her estate. Nancy and her four siblings, each twenty percent beneficiaries, elected to retain and cultivate a family farm comprising the vast majority of their mother's one million dollar estate. With this decision, Nancy relinquished her right to immediate farm sale proceeds of approximately $200,000. She understood she would instead receive $5584 per year in farm income for at least ten years.
Nancy had not received these proceeds at the time of trial.
Following trial, the district court awarded Dennis $33,000 more in uninherited assets than Nancy. The court declined to award Nancy any alimony. Nancy appealed. Our scope of review is de novo . In re Marriage of Benson, 545 N.W.2d 252, 257 (Iowa 1996).
II. Alimony
Iowa Code section 598.21(3) sets forth a number of factors to consider in deciding whether to award alimony. Alimony awards are appropriate following a marriage of long duration, especially where there is a great disparity in earning capacity. In re Marriage of Bell, 576 N.W.2d 618, 622 (Iowa App. 1998). A court may consider the issues of alimony and property distribution together. In re Marriage of Van Ryswyk, 492 N.W.2d 728, 730 (Iowa Ct. App. 1992).
Included are: (1) length of the marriage, (2) age and health, (3) relative earning capacities, (4) levels of education, (4) tax consequences; and (5) the likelihood that the party seeking alimony will become self-supporting at a standard of living comparable to that enjoyed during their marriage.
In declining to award alimony, the court acknowledged the long duration of the marriage and the parties' disparate earning capacities but noted: (1) the parties' wealth was earned by Dennis; (2) the parties' lifestyle had not been extravagant; (3) the property division together with Nancy's inheritance and her share of Dennis' pension would allow Nancy to retain the lifestyle to which she was accustomed; (4) the home mortgage would be paid off in three years; and (5) Nancy would be able to elect a tax-free lump sum distribution of the equity in the parties' home. We disagree that these reasons warrant no award of alimony.
Nancy was almost fifty-one at the time of trial. For approximately half of her married years, she relinquished her opportunity to enhance her education, earn wages, and accumulate retirement savings. She did so to raise the parties' children and maintain their home. Even when she began earning wages, she chose jobs that fit in with her children's schedules and worked full-time for less than seven years of the parties' thirty-one year marriage. As a result of her sacrifices, Dennis was able to earn his college degree, travel extensively for his job, change job locations, and advance in his chosen career. By the time of trial, he was earning four times Nancy's wages and had accumulated significant retirement savings. Under these circumstances, we believe Nancy is entitled to alimony.
Nancy stated she took a course a semester for three semesters before her third child was born but quit to keep up with the children's schedules.
As for the amount, Nancy seeks $1500 per month until Dennis retires, or until she dies or remarries. Although she concedes that a district court is entitled to consider inherited funds, she asserts the $200,000 in farm sale proceeds was too speculative to have been factored in. We agree. As Nancy and her siblings committed themselves to retaining the family farm for an additional ten years, Nancy's possible receipt of $200,000 in 2010 should not have been considered in determining her immediate support needs.
Discounting that portion of the inheritance, we further agree with Nancy that the most she could expect to receive in the short-term as a result of her inheritance was about $10,000 per year — the total of her interest income on the $90,000 cash inheritance and the annual farm income of $5584. Together with her wages, this left Nancy with income that was barely sufficient to meet her expenses. Dennis, in contrast, had a substantially higher income that was expected to increase even more and he received about $33,000 more than Nancy in assets, even with 100 percent of the home equity allocated to her. Cf. In re Marriage of Geil, 509 N.W.2d 738, 742 (Iowa 1993) (affirming award of alimony despite wife's receipt of greater share of property). For these reasons, we believe Dennis should pay Nancy alimony of $500per month retroactive to January 1, 2001 and continuing until Nancy receives her share of Dennis' retirement benefits, dies, or remarries, whichever comes first.
While Nancy conceded she also had the principal of $90,000 at her disposal, she persuasively argued that she needed to save this sum for retirement.
III. Property Distribution
Nancy contends the district court acted inequitably in: (1) refusing to set aside her inherited property before distributing the remaining assets; (2) refusing to equally divide the remaining assets; and (3) refusing to award her $2000 that Dennis spent on gifts for his fiancée after entry of an asset preservation order. We will address each issue in turn.
A. Set Aside of Inherited Property . Iowa Code section 598.21(1) authorizes a court to divide all property equitably, except inherited property or gifts received by one party. Iowa Code § 598.21(1). We only divide inherited or gifted property if failure to do so would be inequitable. In re Marriage of Hardy, 539 N.W.2d 729, 731 (Iowa Ct. App. 1995).
Dennis claimed no right to any portion of Nancy's inherited funds. We conclude that as Nancy had not received any of the $90,000 and receipt of the $200,000 was speculative, the district court should have set aside her inheritance before distributing the parties' assets. See In re Marriage of Goodwin, 606 N.W.2d 315, 320 (Iowa 2000).
B. Equal Division of Assets . The remaining assets that were not informally divided by the parties included their home as well as money, securities, and certain retirement accounts. The court: (1) gave all the home equity of $78,000 to Nancy; (2) divided all but one $6000 securities account equally; and (3) gave each party his or her own employment-related retirement accounts. Dennis' retirement account had a value of approximately $114,500, while the combined value of Nancy's was $22,500. Setting aside the inherited property, Nancy received a total of $110,934.12 and Dennis received $143,915. This award was contrary to the parties wishes. With the exception of the home equity which Dennis was willing to have awarded entirely to Nancy in lieu of alimony, both parties unequivocally stated they wished to have the assets divided equally. As all the assets were accumulated with the significant and lengthy non-wage assistance of Nancy, we agree with the parties that an equal division of these assets was warranted. Accordingly, we award Nancy an equalizing payment of $16,490.44 from Dennis' Thrift Savings Plan. On remand, Dennis shall prepare and submit the necessary documents to effectuate this transfer.
The court did award Nancy the maximum benefit to which she was entitled under Dennis' defined benefit plan. That award is not at issue here.
C. Disposal of Assets . Nancy maintains Dennis transferred $4000 from a joint account that was subject to an asset preservation order, then used $2000 of those funds to purchase an engagement ring and other personal gifts for his fiancée. She claims that, had the funds not been withdrawn, she would have been entitled to fifty percent of them.
A spouse's disposal of assets that would otherwise be subject to division in the dissolution may properly be considered in making an equitable distribution of the parties' property. Goodwin, 606 N.W.2d at 321. The asset preservation order enjoined the parties from withdrawing funds from joint accounts without prior court approval or prior written agreement "except for the purpose of paying routine household or business expenses, utility bills, other regular and normal monthly bills, or necessary and reasonable legal expense for purposes of obtaining representation in this matter." Nancy established Dennis withdrew $4000 shortly before he bought gifts for his fiancée but did not establish the withdrawn funds rather than Dennis' other sources of income were used to purchase the gifts. Accordingly, we decline to order Dennis to reimburse any of these funds.
IV. Attorney Fees
Nancy and Dennis request an award of appellate attorney fees. An award rests within the sound discretion of the district court. In re Marriage of Applegate, 567 N.W.2d 671, 675 (Iowa Ct. App. 1997). As Nancy essentially prevailed and her income is significantly less than Dennis' income, we order Dennis to pay Nancy $750 toward her attorney fees.
Costs of this appeal are taxed to Dennis.
AFFIRMED AS MODIFIED AND REMANDED.