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In Arnold v. Sullivan, the Montana Supreme Court recently addressed the issue of premarital property in divorce. More specifically, the court discussed how to deal with the appreciation of that property during the marriage. In the case, the wife entered the marriage owning a home as her sole property. During the marriage, the mortgage payments on the home were made from the proceeds of the couple’s business where they both worked. During the marriage, the mortgage was paid off and the home was owned free and clear. The question before the Court was what, if any, share of the home’s value is the husband entitled to.

The Montana Supreme Court restated its position that “assets belonging to a spouse prior to marriage, or acquired by gift during the marriage, are not a part of the marital estate unless the non-acquiring spouse contributed to the preservation, maintenance, or increase in the value of that property.” Remember, determining what is part of the marital estate is important in Montana because it is the marital estate which is divided between the parties during the divorce. Anything not in the estate is simply awarded to its original owner (no matter its value).

However, if the other spouse contributes to the premarital property’s preservation, maintenance, or appreciation, that spouse should be awarded his or her equitable share of that preserved, maintained or appreciated value attributable to his or her efforts. This does not include any appreciation in the value of the property due simply to market factors. Basically, this means that if the property increased in value due to the efforts of contributions of the other spouse, that increased value should become part of the marital estate and distributed equitably.

The question remains: when do the other spouse’s contributions rise to level necessary to entitle him or her to an equitable share of the increased value? Unfortunately, Arnold v. Sullivan only makes it clear that the husband’s work which enabled the payment of the mortgage was sufficient to entitle him to an equitable portion of the home’s value which was preserved, maintained or appreciated by his efforts. The Montana Supreme Court expressed no opinion on what that value was, and provided little guidance for future cases that don’t exactly match this scenario. But, this case provides an excellent review of premarital property in Montana divorce and gives us divorce attorneys a little more to go on.