Deboer v. Deboer, NO. 2012-CA-000464-MR AND NO. 2012-CA-000514-MR (Ky. App. 2014)
Traceable 401(k) Gains On Pre-Martial Contributions Remain Non-Marital When the Increase Does Not Result From the Efforts of Either Party

Rendered: August 22, 2014
Not To Be Published
Opinion Affirming

I’ve written several recent blog posts providing ample citation to cases in both Kentucky and Ohio reciting the law concerning the evidentiary burden of proving non-marital amounts in retirement accounts.  Deboer raises the issue once again, with Wife claiming that the trial court erred in calculating Husband’s non-marital interest in his 401(k) by including a net increase in the value of his premarital contributions realized over the course of the marriage.

We know the question that is raised anytime passive growth accrues on pre-marital contributions made to a 401(k)-type plan during the marriage.  Who gets the money?  The answer has been made clear through the litany of repetitious cases presented to the Courts of Appeals in both Kentucky and Ohio.  When passive growth on pre-martial contributions occurs during the period of marriage, if it is traceable in such a manner that the party claiming the non-marital interest can meet their evidentiary burden, that party takes home the proverbial money bag.

This is a well-settled area of law that can’t seem to be set out to pasture:  traceable gains on pre-martial contributions are non-marital when the increase does not result from the efforts of either party.  As in Deboer, this includes when market forces - rather than efforts of the parties - generate the increase in value.

The trial court in Deboer did just as the Kentucky Court of Appeals has previously avowed – over and over again.  The trial court granted Husband an additional non-marital portion of his 401(k) that represented the gains attributable to his pre-marital contributions realized over the course of the marriage, but which did not result from any effort by Husband.  Why?  As the Court of Appeals found in affirming, there was ample evidence within the record tracing the growth upon the pre-marital funds.

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For an in-depth analysis of the issues relating to tracing and proving the evidentiary burden in both Kentucky and Ohio, see my blog post dated June 12, 2014.  For a practical tip to help ‘short-cut’ writing the supporting brief on this issue in Kentucky, see my blog post dated July 1, 2014.