Property purchased from a trust is marital property subject to division upon divorce.

In 2001, Danny Stevens’s parents established a trust for the benefit of Danny and his three brothers. The parents then sold a piece of real property known as the “Farm” to the trust. Later, Danny and his wife jointly purchased the Farm from the trust for cash and a promissory note. Danny and his wife later paid off the promissory note using the proceeds from the sale of their current residence.

In Danny’s subsequent divorce action against his wife in the Nelson County Circuit Court, Danny claimed that the Farm was separate property not subject to division since he received it as a gift or inheritance from his parents. Danny’s wife claimed that the Farm was marital property subject to division because Danny and his wife jointly purchased the Farm from the trust. The trial court ruled that the evidence showed that Danny and his wife purchased the Farm from the trust and, as such, Danny did not inherit the Farm by means of gift or bequest.

On appeal, the Virginia Court of Appeals upheld the circuit court’s decision on the grounds that because Danny and his wife purchased the Farm from the trust, the Farm was owned jointly by Danny and his wife and was marital property subject to division upon divorce.