SHANA E. KIM Appellee
JOHN Y. KIM Appellant
FROM JUDGMENT ENTERED IN THE COURT OF COMMON PLEAS COUNTY OF
SUMMIT, OHIO CASE No. 2015-10-3198
BRADLEY J. BARMEN, ATTORNEY AT LAW, FOR APPELLANT.
A. LOWRY AND ADAM R. MORRIS, ATTORNEYS AT LAW, FOR APPELLEE.
KENNETH GIBSON, ATTORNEY AT LAW, FOR APPELLEE.
DECISION AND JOURNAL ENTRY
A. SCHAFER JUDGE
Defendant-Appellant, John Y. Kim, appeals the judgments of
the Summit County Court of Common Pleas, Domestic Relations
Division, granting a divorce decree and awarding
Plaintiff-Appellee, Shana E. Kim, attorney fees.
This appeal stems from a divorce action between John Y. Kim
("Husband") and Shana E. Kim ("Wife").
Husband and Wife were married in 1997 and three children were
born of the marriage. Wife filed a complaint for divorce on
October 25, 2015. Husband answered and eventually filed a
counterclaim for divorce.
Husband is a licensed attorney and financial advisor. He owns
Symphony Financial Services, Inc. ("Symphony") and
Kim & Associates, LLC ("K&A"). Although
Wife worked outside the home in the early years of their
marriage, she became a full-time stay-at-home parent in 2003.
Although the parties entered into stipulations as to the
value and allocation of some of their marital assets, the
matter proceeded to trial on the disposition of specific
property, the disposition of the life insurance policies held
within an irrevocable trust, and Husband's income
available for spousal support. The trial court issued a final
decree of divorce on May 26, 2017. The decree provided for
property division, spousal support to Wife, a distributive
award to Wife, and attorney fees to Wife.
Husband filed a timely appeal, raising five assignments of
error. Wife filed a motion to strike Husband's brief
alleging that Husband had attached impermissible materials to
his brief in violation of Loc.R. 7(B)(10) of the Ohio Ninth
District Court of Appeals, and that Husband was seeking to
introduce evidence that was not part of the record below.
This Court thereafter ordered the non-complying appendix
attachments to be stricken, but declined to strike
Husband's brief in its entirety.
Husband subsequently filed a motion requesting that this
court reconsider its order striking Husband's appendix
attachments, arguing that he was not seeking to add new
matter to the record because the attachments were properly
admitted into evidence at trial, but that "[t]hrough
inadvertence or otherwise, the documentation was not
submitted to the Court complete." This Court
denied Husband's motion because the documents stricken
were not permitted to be part of the appendix pursuant to
Loc.R. 7(B)(10). This Court noted, however, that Husband was
not precluded from submitting the issue to the trial court
pursuant to App.R. 9(E).
Husband thereafter filed a motion to correct the record in
the trial court pursuant to App.R. 9(E). Following a hearing,
the trial court denied Husband's motion and granted Wife
attorney fees. Husband filed a timely appeal raising two
assignments of error related to the grant of attorney fees.
This Court sua sponte consolidated the appeals. We have
reordered the assignments of error for ease of analysis.
Assignment of Error I
The trial court erred by concluding that the cash
value of life insurance policies held within the John Y. Kim
Irrevocable Trust constitutes marital property subject to
In his first assignment of error, Husband contends that the
trial court erred when it determined that the cash value of
the life insurance policies held within the John Y. Kim
Irrevocable Trust was marital property subject to division.
Pursuant to R.C. 3105.171(B), a court is required during
divorce proceedings to determine what of the parties'
property constitutes marital property and what constitutes
separate property. "Because the determination of whether
property is marital or separate is a fact-based
determination, we review a trial court's decision under a
manifest-weight-of-the-evidence standard." Kolar v.
Kolar, 9th Dist. Summit No. 28510, 2018-Ohio-2559,
¶ 30, citing Morris v. Morris, 9th Dist. Summit
No. 22778, 2006-Ohio-1560, ¶ 23. Accordingly, before
reversing such a judgment, this Court "must determine
whether the trier of fact, in resolving evidentiary conflicts
and making credibility determinations, clearly lost its way
and created a manifest miscarriage of justice."
Boreman v. Boreman, 9th Dist. Wayne No. 01CA0034,
2002-Ohio-2320, ¶ 10. In weighing the evidence, we must
always be mindful of the presumption in favor of the finder
of fact. Eastley v. Volkman, 132 Ohio St.3d 328,
2012-Ohio-2179, ¶ 21. "Only in the exceptional
case, where the evidence presented weighs heavily in favor of
the party seeking reversal, will the appellate court
reverse." Boreman at ¶ 10.
On appeal, Husband argues that the cash value of the life
insurance policies held within the John Y. Kim Irrevocable
Trust did not constitute marital property because they are
not property owned by either spouse. An irrevocable trust is
an independent third-party entity, and, generally, neither
the trust nor the assets held by such a trust are subject to
equitable division in a divorce. See Guagenti v.
Guagenti, 3d Dist. Allen No. 1-16-47, 2017-Ohio-2706,
¶ 70. However, "'[m]arital property'"
by definition includes "[a]ll interest that either or
both of the spouses currently has in any real or personal
property," and may include a property interest short of
absolute ownership. R.C. 3105.171(A)(3)(a)(ii); see
Guagenti at ¶ 71. Property paid for with marital
funds, but that is held by a third party, including a trust,
may be treated as marital property under some circumstances.
Goswami v. Goswami, 152 Ohio App.3d 151, ¶ 61
(7th Dist.2003), citing Baker v. Baker, 83 Ohio
App.3d 700, 703 (9th Dist.1992); see Katz v. Katz,
10th Dist. Franklin Nos. 13AP-409, 13AP-417, 2014-Ohio-1255,
¶ 24-25; Vulgamore v. Vulgamore, 4th Dist. Pike
No. 16CA876, 2017-Ohio-4114, ¶ 20-24; Janosek v.
Janosek, 8th Dist. Cuyahoga Nos. 56771, 86777,
2007-Ohio-68, ¶ 75-76. "The party seeking to have
an asset classified as separate property must prove by a
preponderance of the evidence that the asset can be traced to
separate property." Katz at ¶ 15.
Accordingly, we agree with the Third District's holding
in Guagenti, that when reviewing a trial court's
determination regarding the nature of an irrevocable trust in
the context of a divorce proceeding, a "case-by-case
approach based upon the intent and conduct of the relevant
parties with regard to the formation and the operation of the
trust" to be the most appropriate approach and
consistent with the manifest weight standard of appellate
review. Id. at ¶ 69.
In this case, the trial court made the following findings
regarding the John Y. Kim Irrevocable Trust. The parties were
married March 29, 1997. Husband executed the John Y. Kim
Irrevocable Trust Agreement on July 28, 1999, and was the
grantor of the trust. Husband's brother was appointed as
trustee and resides in the State of New York. Currently, Wife
is the primary beneficiary of the trust and their three
children are the secondary beneficiaries. The current corpus
of the trust is insurance policies which were purchased with
marital monies. At trial, Husband testified that he created
the trust because if anything happened to him he wanted to
protect his family through the "rights and
protections" of a trust because he believed Wife was
fiscally irresponsible and did not want her to be a lump sum
Although Husband testified that he spoke to Wife about the
trust and explained it to her, the trial court found
Wife's testimony that the trust was created without her
knowledge or consent to be credible. In making this
determination, the trial court noted that Wife testified she
first became aware of the trust during the divorce
proceedings and that Husband had never discussed the trust
with her nor shared a copy of it with her. Wife stated that
Husband was the bookkeeper and bill payer during their
marriage, prepared their tax returns, and made the vehicle
purchasing decisions. She further stated that Husband never
discussed finances with her, did not want her to open any
mail that contained financial matters, and became angry and
told her she was ignorant and had no business sense when she
asked about financial matters. Additionally, this Court's
own review of the record shows that Husband offered no
evidence other than his own testimony to suggest that Wife
had any knowledge of the trust. Accordingly, we conclude that
the trial court's finding was based on competent credible
The trial court ultimately concluded that the cash value of
the life insurance policies within the trust were marital
property because (1) the premiums were paid for with marital
monies and (2) despite the fact the policies were held in
trust, Husband retained control over the policies and had
taken loans against their cash value during the marriage,
facts Husband does not dispute. A review of the trial
testimony shows that Husband, a self-identified estate and
trust attorney, stated that he personally drafted and
executed the trust in 1999 and named his brother as the
trustee. Although the trust was initially funded with term
life insurance with no cash value, Husband later replaced
those policies with permanent policies he admitted to
purchasing with marital monies. He further testified that
although Wife was the current primary beneficiary of the
trust, once their divorce is finalized, pursuant to Ohio law,
she will be deemed to have predeceased him and their three
children will become the primary beneficiaries. Husband
testified that he borrowed against the life insurance
policies to fund both business and personal obligations, but
that he did not discuss the loans with Wife. Finally, the
trust requires that each beneficiary of the trust be informed
of their right of withdrawal, and although Husband claimed to
have letters signed by the beneficiaries of the trust
declining their right to make withdrawals, no such letters
were presented at trial.
Upon review, we cannot say that this is an exceptional case
where the trial court clearly lost its way and created a
manifest miscarriage of justice when it determined, under the
specific circumstances of this case, that the cash value of
the life insurance policies held within the John Y. Kim
Irrevocable Trust were marital property subject to division.
See Boreman, 2002-Ohio-2320 at ¶ 10. If this
Court were to hold otherwise, it would allow a spouse to
unilaterally, and without the consent or knowledge of the
other spouse, move martial money out of the reach of the
other spouse by merely placing it in irrevocable trust.
Husband next argues that the trial court lacked jurisdiction
to direct the trustee of the John Y. Kim Irrevocable Trust to
take any action pursuant to the trust because neither he nor
the trust were joined as parties pursuant to Civ.R. 75(B). A
review of the decree, however, shows that the trial court did
not order the trustee nor the trust itself to take any
action. Rather, the trial court credited the cash value of
all the life insurance policies within the trust to Husband
when the court sought to equalize the distribution of marital
property. Because a domestic relations court "has full
equitable powers and jurisdiction appropriate to the
determination of all domestic relations matter[, ]" and
did not order the trust or trustee to take any action in this
case, we conclude that Husband's contention is without
merit. Maloney v. Maloney, 160 Ohio App.3d 209,
2005-Ohio-1368, ¶ 57 (2d Dist), quoting R.C. 3105.011;
see R.C. 3105.171(B).
Husband's first assignment of error is overruled.
Assignment of Error V
The trial court erred in its designation of the
Yamaha Piano as marital property.
In his fifth assignment of error, Husband contends that the
trial court erred when it determined that a Yamaha Piano was
marital property because the "[p]iano was a ...