Divorce Marital Residence Marital Property Donative Intent
Harvey v. Harvey, PICS Case No. 17-1140 (Pa. Super. July 3, 2017) Ott, J. (20 pages).
Trial court erred in finding donative intent when husband and wife refinanced the residence they bought before marriage and the new deed changed their ownership from joint tenants with the right of survivorship to a tenancy by the entireties because the evidence showed that the new deed was executed because wife's name changed and the bank required it, the parties never discussed whether there was a gift or not and the parties continued to split all the expenses fifty-fifty. Order vacated.
The parties purchased the marital residence as joint tenants with the right of survivorship prior to their marriage. They subsequently married with a valid prenuptial agreement. Both parties were retired and split marital expenses, including the mortgage, fifty-fifty during the marriage and each contributed fifty percent of the down payment on the residence. Wife filed for divorce and petitioned for special relief asserting the parties could not agree on whether the prenuptial agreement covered the marital residence. She also asserted that a deed executed after the marriage as part of a refinancing converted the residence into a tenancy by the entireties. The trial court found that the new deed changed the parties' ownership and constituted a gift to the martial estate, held that the martial residence constituted martial property subject to equitable distribution and ordered the property sold. The master recommended that each party received 50 percent of the proceeds from the sale, wife filed exceptions and the trial court gave 60 percent to wife and 40 percent to husband. Husband appealed.
Husband contended that the trial judge erred in finding that he made a gift of his equity in the residence when the parties re-financed the mortgage. The court found that the trial judge misapplied the law in concluding that husband failed to rebut the presumption that the transfer constituted a gift to the marital estate. Since the parties bought the residence prior to their marriage and owned it as joint tenants with the right of survivorship at the time the new deed was executed, donative intent in creating a tenancy by the entireties was a mutual issue. Wife's petition for special relief made no averment regarding her own donative intent in signing the new deed. At the hearing, she testified that the new deed was executed because her name changed and the bank required it. The parties' counsels stipulated that the parties never discussed whether it was or was not a gift. Husband contended that there was no donative intent. The court noted that the change in ownership was not an acquisition of property by either party.
The signing of the new deed did not establish donative intent. The fact that the parties continued their arrangement of each party paying 50 percent of the mortgage, real estate taxes, homeowner's insurance and household utilities also contradicted a donative intent. The court also noted that economic justice required that the proceeds of the residence be split fifty-fifty.