Rice v. Rice


On March 24, 2011, the Kentucky Supreme Court reviewed the decision of the Greenup County Circuit Court (Trial Court) to determine whether the Trial Court abused its discretion in finding that credit card debt incurred solely by the husband and an adult son without the wife’s knowledge was marital property and ordering the wife to be assume one-half of the debt. The Kentucky Court of appeals affirmed the Trial Courts decision, but the Supreme Court reversed.


After 42 years of marriage, the husband and wife filed for divorce. At the time of their divorce they had one adult child. In their divorce decree, the Trial Court ruled that credit card debt amounting to $65,000 was marital property and ordered the wife to be responsible for half of it.


The credit card debt was incurred by the adult child with the help and knowledge of the husband. Only after beginning to receive telephone calls from debt collectors did the wife learn of the credit card debt. Before that time, the wife did not know of the credit cards’ existence. After learning of the debt the wife demanded that the husband stop, but the husband surreptitiously continued to help the adult child incur more credit card debt.


It is within the discretion of the trial court to determine whether property or debt is marital or non-marital. Sexton v. Sexton, 125 S.W.3d 258 (Ky. 2004). The burden of proof is on the party that incurred the debt and claims that it is marital. Allison v. Allison, 246 S.W.3d 898 (Ky. App. 2008). The Kentucky Supreme Court established four factors to be considered in determining whether debt is marital or non-marital: 1) was the debt incurred for the purchase of marital property, 2) was the debt necessary to maintain and support the family, 3) what was the extent and participation of each party in incurring or benefitting from the debt, and 4) what are the economic circumstances of the parties after divorce to allow for payment of the debt. Neidlinger v. Neidlinger, 52 S.W.3d 513, 523 (Ky. 2001).


After applying the four Neidlinger factors, the court concluded that none of them applied. The debt was not incurred for the purchase of marital property. The debt was not necessary to maintain and support the family because the law requires competent adults to support themselves and the child was a competent adult. The wife did not participate in or benefit from incurring the debt. Finally, having just retired from an eight-dollar-an-hour job, the wife had no means to pay half the debt.


The court further stressed that the wife was not a party to the credit card contract and had no legal obligation to pay the debt. In order for the Family Court to require the wife to assume half of the debt on equitable grounds, the wife must have some nexus to the debt such as knowledge, consent, or benefit.


Ultimately, the Supreme Court concluded that the Trial Court abused its discretion when it found the credit card debt to be marital property and ordered the wife to assume responsibility for half of the debt.

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