                                                 NO.        92-128
                    IN THE SUPREME COURT OF THE STATE OF MONTANA
                                                        1992

BONNIE L.           MISCHKE,
                    Plaintiff          and Appellant,
         -v-
CALVIN         L.   MISCHKE,
                    Defendant          and Respondent.




APPEAL FROM:                    District  Court of the Twentieth     Judicial    District,
                                In and for the County of Lake,
                                The Honorable   C. B. McNeil,   Judge presiding.


COUNSEL OF RECORD:
                    For    Appellant:
                                James      C.   Bartlett,            Hash,    O'Brien        &     Bartlett,
                                Kalispell,      Montana
                    For    Respondent:
                                R. M. Kehew,       Kalispell,          Montana


                                                 Submitted           on Briefs:         October      29,       1992
                                                                       Decided:         February        2,     1993
Filed:



                                                     'Clerk
Justice          Fred 3. Weber delivered                          the Opinion                     of the      Court.

         This       is an appeal               by the Petitioner,                          Bonnie          L. Mischke,                from
an order           distributing              marital            assets             by the District                  Court        of the
Twentieth           Judicial          District,                Lake County,                Montana.               We affirm.
         We have restated                    the         issues        for         our review         as follows:
          1.         Whether          the           District           Court             erred       by      including                Mrs.
Mischke's           "inheritance"                   in the marital                   estate.
          2.       Whether the District                        Court     erred            in determining                 that     gifts
from     Albert         Hoffman           were made to both                         Mr.     and Mrs.          Mischke.
            3.     Whether          the      District            Court         correctly             determined                 the    net
assets           of the marital               estate.
            4.      Whether           the       District             Court            abused         its          discretion              by
awarding           52% of the             marital          estate            to Mr. Mischke                  and 48% to Mrs.
Mischke.
            Bonnie and Calvin                 Mischke            (the Mischkes)                   were married              on March

27,     1971 in Wolf                Point,          Montana.            At the            time,      Mr. Mischke                 worked
for     the Wolf            Point     Fanners'             Union Elevator                   and Mrs. Mischke                     worked
for     her father,              Albert        Hoffman,           doing            general         farm labor.                  Shortly
after        the     marriage,            Mr. Mischke               lost           his     job      at the          elevator           and
began working                on Mr. Hoffman's                    farm.             The relationship                     between Mr.
Mischke            and Mr.          Hoffman              was strained                    throughout               the     Mischkes'
marriage.              Nonetheless,                  the       record          establishes                 that      Mr.        Hoffman
made substantial                     gifts          to     the    Mischkes                throughout               the      marriage
until        his     death       in June of 1990.
            Shortly         after     they were married,                           Mr. Hoffman bought                    a house in
Wolf Point            for     the Mischkes                 to live           in.      They lived             there         rent-free
                                                                   2
for     eight           years.             After          their            three           children            were     born,          Mr.     Hoffman

built       a larger                 home for              the          Mischkes.                  This        new home was built                            in

1979       on         property                  where           an         older           home         was      also           located.                 The

Mischkes              received              the        rents          from          this        home to          apply          as payments                  to
Mr.     Hoffman              on the             new home.

           Albert            later          deeded             the      entire             property            to the          Mischkes.               They

were       to    repay           Mr.        Hoffman               for       the         materials              for      this       new home but
not     his          labor.                Mr.         Hoffman              later             forgave          a large            part         of      this

debt.           In      September                  1986,          the       Mischkes               moved        to      the      Flathead              area

and rented                 a home on the                   East            Shore           of Flathead               Lake.         The Mischkes
continued               to     receive                 rents         from          both         Wolf      Point         homes.

           In        1987,         Mr.          Hoffman              helped              the      Mischkes             purchase              the       home

they       had        been         renting               for         the        previous               year.           The      purchase              price

was $46,500.                     Mr.        Hoffman             and his                wife       owned an undivided                          one-half

interest              and the              Mischkes               owned the                    other      one-half              interest.                The

Mischkes              agreed           to        pay Mr.             and Mrs.                  Hoffman         one-half            the        purchase

price         plus         $10,000               for     debts             Albert              had paid          for     them--a              total          of

$33,250.                They         subsequently                     defaulted                  on the         loan      to     the     Hoffmans.

Periodically,                    the        Hoffmans                 forgave             some of the              payments             and allowed
double           credit              for         others.                   Approximately                       one      month          before            Mr.

Hoffman's                  death           in      1990,             the         Hoffmans                conveyed              their          one-half

interest              in     the       home to             the          Mischkes.
           In     February                 of      1990,          the       Mischkes               sold        the      Wolf       Point            rental

homes           for          $60,000.                     Some             of          this       money           was          used          for       home

improvements                   to          their          Flathead                  home.              Mrs.       Mischke              customarily

handled           all        the       financial                  affairs                for     the      parties.               She testified


                                                                                   3
that      the         $59,555          cash         received                from     the       sale     was all            spent         by
September             1990 for            home improvements,                          living          expenses        and debts.
She further                   testified             that          she       transferred               some of         this         to      a
Capital         Preservation                 Fund and later                   to her separate                 savings        account
at Whitefish                  Credit         Union.
          Following              Mr.      Hoffman's               death        in June of 1990,                  Mrs.        Mischke
received         a death benefit                        which testimony                 established             was to be her
inheritance               from         Mr.     Hoffman.                  This       money was deposited                       in        the
joint      checking             account.                Mrs. Mischke                testified          that     she used some
of her         inheritance                to pay marital                      debts.           Mrs.     Mischke           testified
extensively              about          her        reasons           for      switching           funds        among various
bank accounts                  in an attempt                    to explain          how her inheritance                    could          be

traced         from       the       date           it       was received                until         after         the      date        of
separation             and to show that                         the inherited              funds were kept                separate.
She also          presented               much evidence                     in an attempt               to prove           that         Mr.
Hoffman's             gifts       were intended                    for her alone and not as joint                             gifts.
          Testimony             established                 that     the Mischkes                enjoyed        a standard               of
living          far      beyond              what         they       could           have       afforded            without             Mr.
Hoffman's             generosity.                  In addition               to the gifts             and loans           described
above relating                  to the homes, Mr. Hoffman made numerous other                                                     gifts
of      cash     and other                   items          to     the       Mischkes.                Mr.     Hoffman's             farm
corporation              paid       for       health             and life           insurance,          telephone            service
and $150 in food                    each month for                      the Mischkes.
          The sole             issues        for        trial      were calculation                   and distribution                   of
marital         property            and child               support.               The District             Court     determined
that      the value              of the marital                    estate,           including          the home and cash

                                                                        4
in     Mrs.        Mischke's                 account,                 was            $175,402.                         Mr.         Mischke             received
assets           valued         at $91,683                 and Mrs.                  Mischke                   received             assets          valued          at

$83,719.             Mrs.          Mischke           sold            other            marital                   assets             after        the     parties

separated            through             Gardner                  Auction                 Service                in    Missoula.                    The award

to    Mr.        Mischke              includes             a lump               sum child                       support              award          as he has

the     minor        children             living               with         him.               Mrs.        Mischke                 was unemployed                   at

the     time        of     trial          except               for        part-time                   piano             instruction.

                                                                                I.
         Whether                the     District                  Court          erred               by including                        Mrs.       Mischke's

"inheritance"                    in     the      marital                  estate.
         Mrs.        Mischke             contends                  that         her            inheritance                    should            be separate

property.                 Mrs.         Mischke             testified                       that           she         transferred                   cash       from

one account                to         another             in      order              to        keep            the      inheritance                    separate

from        money         received             from            the        sale            of        the        Wolf         Point          homes.

            The     record             establishes,                        however,                   that            prior          to       the      parties'

separation                in January              of 1991,                  inherited                     funds         were          commingled               with

other         marital            income,           and although                           Mrs.            Mischke             controlled                marital

finances,                she       made          little               effort                   to         separate                 her        inheritance.

Consequently,                    we are          unable               to        determine                      that         the       total           amount        of

the         inheritance                   was             still                 intact                    at          the          time          of        trial.

Nonetheless,                     the         record                establishes                            that          the           District               Court

considered                the      nature          of the             asset               and awarded                       a substantial                  sum of
cash        to     Mrs.         Mischke.

            Our     standard              of       review                 for        questions                    of        law       is      whether          they

correctly                apply         the       law.                In     re        the           Marriage                  of     Hamilton              (Mont.

1992),            835      P.2d         702,        704,             49         St.Rep.                   604,         606.              An     inheritance


                                                                                 5
received            during             the     marriage              may be a marital                           asset.                  Section          40-4-

202(1),            MCA.           We conclude                      that        under           the         facts             of     this          case       the

marital         estate            could            properly           include               Mrs.        Mischke's                   "inheritance."
          We hold               that         the        District           Court             did        not         err      by      including               the

amount         of     Mrs.         Mischke's                  inheritance                    in      the       marital               estate.

                                                                           II.

          Whether               the         District               Court            erred          in      determining                       that        gifts

from      Albert           Hoffman              were          made to               both       Mr.        and Mrs.                 Mischke.
          Mrs.        Mischke                disputes              the         District                 Court's              finding              that       the

gifts       were          not     made to               her     individually,                        particularly                         the     Flathead
area      home.           She contends                     that        ownership                  of the            family              home resulted

from       gifts          made to             her        alone         from          her       father               and that               Mr.      Mischke

should          not          be        awarded                100%        of         property                 gifted                to       her.            She

presented             testimony                    to     establish                  that         both         the          Flathead              home and

her      inheritance                   could            be traced              as gifts              from           Mr.          Hoffman          intended
for      her        alone,            even         though           the        Hoffmans                 transferred                      title         to    the

home to            both         Mr.      and Mrs.               Mischke              as joint                 tenants              with          the     right

of      survivorship.

           However,               cash        sums          received                 from         the      sale             of     the       Wolf        Point

homes          and        later             from         Mrs.        Mischke's                    inheritance                       were         not        kept

separate.                 They          were            deposited               in     joint             accounts.                       Mrs.       Mischke

testified              that             although                cash       was              commingled                      in      joint           marital

accounts,              the        $59,555                from       the        sale          of      the        Wolf              Point          homes       was

exhausted             prior            to      the        parties'               separation                    to      pay         marital             debts,

living         expenses                and home improvements                                 and that                 all         the       inheritance
was kept             intact.                 The record                does          not       support               her          contention                that


                                                                                6
her     inheritance                       can be accounted                                   for      separately.

           Our standard                     of review                      for         a district                 court's               factual               findings
relating           to         the         division                 of        marital                 property                is        whether                they        are

clearly           erroneous.                          Hamilton,                       835 P.Zd              at        704.             A finding                 is       not

clearly           erroneous                      if        it         is         supported                      by     substantial                       evidence.

Interstate              Prod.             Credit                Ass'n            v.      DeSaye             (1991),            250 Mont.                  320,         322-

23,     820 P.2d               1285,             1287.                Substantial                         evidence                is        evidence             that         a

reasonable               mind         might               accept                 as adequate                     to     support                a conclusion:

it     consists                of         more            than             a          scintilla                  of      evidence                   and         may        be
somewhat               less          than             a     preponderance.                                      Barrett                v.      Asarco,                 Inc.

(1990)       I 245 Mont.                     196,           200,            799 P.2d                  1078,            1080.
           Letters             from         Albert               discussing                        his      gifts            were           written            to      both

Mr.     and Mrs.              Mischke.                     All        real             property                 was conveyed                       to    them          both

as      joint           tenants                   with             rights                    of          survivorship.                               The         record
establishes                   that          ownership                       of         the         Flathead              home            resulted                partly

from       Mr.     Hoffman's                    gifts             and partly                        from         the      Mischke's                     payments.

           Despite             Mrs.         Mischke's                       testimony                     that         Mr.        Mischke               did      little

to     maintain               or      enhance                   the         value             of         this         property,                 the           District

Court       found            that         the         gifts             from           Mr.         Hoffman             were            intended               as gifts
to both          Mr.         and Mrs.                 Mischke.                        Property              gifted            during               marriage               may
be excluded                  from          the         marital                   estate,             however,                where            the        objecting

spouse           can     claim             no contribution                                   to      the         property's                   value.                 In    re
the     Marriage               of         Dailey                (1988),                232 Mont.                 235,         242,           756 P.2d                 1131,

1135.              Such              is         not             the              case              here.                While                Mr.         Mischke's

contributions                      may not                have        been              great,            the         record            establishes                    that
he helped               to      construct                       the         Wolf             Point          home,            helped             to       construct


                                                                                         7
improvements                     to        the       Flathead                   home,              contributed                      to      the     maintenance

of both             homes           and that             his          earnings                     also      contributed                      to payments                 to
Mr.       Hoffman              from        the         parties'                  combined                  income              during             the    marriage.

We conclude                    there            is     substantial                           evidence              in     the            record         to     support

the       District               Court's                finding                 that              Mrs.       Mischke                failed          to        prove       an

individual                  gift.

           We hold                  that         the         District                    Court             did          not         err      in     determining

that       gifts           from        Mr.           Hoffman               were made to both                                  Mr.        and Mrs.             Mischke.

                                                                                      III.
           Whether               the       District                  Court             correctly                 determined                   the        net     assets

of       the        marital            estate.

           Mrs.            Mischke's                   argument                      focuses               upon          the         net      amount             of      the

marital              estate.                She claims                     that          the         total          "cash             in     bank,"            found      by

the        District                   Court             to           be         $47,999.00,                        is          incorrect.                       If       her

inheritance                     must         be included                         in          the         marital              estate,              she        contends

that       the           correct            amount              is        $34,995.43.                        This             figure          represents                 the

amount              of     her        inheritance                          ($46,988.41                       gross:             $43,319.54                    actually

received                 net     of        taxes)            less              the      amount             of pre-separation                                 debts       and

attorney's                     fees        she claims                      to        have          paid.

               To        support             this            contention,                            Mrs.           Mischke                 introduced                  into

evidence                 a copy            of        a savings                   account                 record           from             Whitefish             Credit

Union,              showing            a balance                     of        $45,667.02                    as of            April          23,        1991.          Mrs.
Mischke              did       not     provide                any bank                   statements                     or other              information                 to

demonstrate                     the         amount              of         cash              in    the        account                 as     of     the        date       of

trial,              which        was December                             2,     1991.

               Although               the            District                   Court              did        not         specifically                         state           a


                                                                                             8
factual          finding              relating          to how it                   determined          the     total          "cash       in
bank,"        the        amount determined                           ($47,999.00)               is     only      $2,332.00           more
than the amount shown as of April                                              23, 1991.             A trial       judge        is free
to accept           any valuation                      of property                   he wishes         so long          as there           is
substantial                evidence              to     support                the    value         selected.             In     re the
Marriage            of     Hammill              (1987),              225 Mont.               263,      732 P.2d           403.            The
District          Court          could          have reasonably                       determined           that         this      amount
represented               earned interest                       from       the date of deposit                   until         the date
of     the       decree           or       that         it          represented               an     amount        Mrs.         Mischke
received            from         sales          of      marital                property         that       she     sold         through
Gardner          Auction           Service             in Missoula.
          Mrs.      Mischke              also        contends           that         Mr. Mischke           should         be ordered
to pay her               for     50% of the                 total       pre-separation                  debts      that        she paid
from her            inheritance,                     represented                by the         $13,003.57           figure.               She
testified            that        she borrowed                       $13,000          after      the parties               separated,
some of which                  she used to pay $8,444.31                                     in pre-separation                  marital

debts        instead             of      using         her          inheritance              money to           pay them.                 She
subtracted               $13,000.00                  (the       amount of              the     loan)       to     arrive         at her
calculation                for        "cash          in bank."
           Mrs.     Mischke              failed         to produce                   adequate         financial           records          to
support          her contention                      that       the money was used in this                          manner.               The
District          Court          noted          that         "the       evidence             introduced          by the parties
with         respect             to       marital               debt           is     confusing,               conflicting                and
incomplete."
           The decree                 provides          that           any indebtedness                  incurred          after          the
date        of    separation                    is     not          part        of     the     marital           estate.               This

                                                                           9
includes          the           $13,000.00                  borrowed               by Mrs.               Mischke.                 It    also        provides
that      both         parties                   remain            jointly               responsible                      for          unpaid        marital

debts.            Mrs.            Mischke               testified                  but        produced                   inadequate                 proof        to

substantiate                      that             two           marital                debts             totalling                    slightly                over

$Z,OOO.OO              remained                  unpaid            at      the         time         of     trial.
          A district                        court           is      not          required                  to       determine                 and         assign

marital           debts               based            on         one        party's                testimony                   where           copies           of

statements                 from            creditors               or      other          evidence                  to     support              claims          has

not    been       introduced.                          In re the              Marriage                   of Purdy               (1988),           234 Mont.

502,       764         P.2d            857.               The        record              establishes                       that          Mrs.        Mischke
handled         all          financial                 matters               for        the     parties                  and that             she did           not

provide         copies                of     accounts               as requested                         during           discovery.                 Similar

to     Purdv,               the            evidence                Mrs.            Mischke                 introduced                    at       trial          to

establish                  marital                debt           was        sketchy;                     she        testified                  as     to        the

amounts,          but           did        not     provide              copies            of statements                         or other            credible
evidence              to        support             her           claims.                Her         evidence                   consisted                 of    her

handwritten                  summaries                   and oral                testimony.                     We affirm                 the       District

Court's           refusal                  to      allocate                part          of     the             $13,000.00                 debt           to    the

husband.

          We hold               that         the       District              Court            did        not      err      in determining                       the

net      assets            of     the           marital            estate.

                                                                                 IV.

          Whether               the         District               Court           abused            its        discretion                    by awarding

52% of        the          marital               estate            to      Mr.         Mischke             and 48% to                   Mrs.        Mischke.

          The       District                    Court        awarded                52% of               the      marital               estate            to    Mr.

Mischke,            including                    the      home,            stating             that:


                                                                                   10
          .       .The Court has taken all factors
                       .                               into consideration     and
          awards a larger        share of the marital   estate,  including    the
          Woods Bay family home, to the Respondent as a one time cash
          settlement      in lieu of support,  and Petitioner    shall have no
          further    child support obligation   for the minor children     of the
          parties.
          In           dividing           marital         property,              courts        must        fashion          a
distribution                    which         is    equitable              to      each       party        under         the
circumstances.                      Hamilton,       835 P.2d at 704.                  Obtaining          an equitable
distribution                   at times       requires        the court          to engage in discretionary
action            which cannot            be accurately             categorized             as a finding          of fact
or a conclusion                     of law.         Such discretionary                     findings       will     not    be
disturbed                  absent     an abuse of discretion.                         In     re the       Marriage        of
Danelson                   (Mont.    1992),        833 P.2d         215,        49 St.Rep.        597.           Abuse of
discretion                   in apportioning           the marital              estate       is manifested            by a
substantially                   inequitable          division         of the marital                  estate.       In re
the Marriage                   of Holston          (1983),      205 Mont.           470,      668 P.2d 1048.
          Under              Montana        law,      gifts         and         inheritances             are      treated
similarly                  in a dissolution           of marriage               proceeding.            Section      40-4-

202 (1)       I       MCA, provides
          . . . the court.           . . shall    . . . finally     equitably    apportion
          between the parties             the property      and assets       belonging     to
          either       or both,     however and whenever acquired             and whether
          title     thereto     is in the name of the husband or wife or both .
          . . In dividing           property    acquired     . . . by gift,        bequest,
          devise or descent; property            acquired in exchange for property
          acquired       . . . by gift,      bequest, devise, or descent . . . the
          court shall consider those contributions                  of the other spouse
          to the marriage,          including:
                   (a) the nonmonetary contribution             of a homemaker;
                   (b)    the     extent     to  which     such contributions          have
          facilitated        the maintenance of this property;             and
                   (c) whether or not the property              division     serves as an
          alternative        to maintenance arrangements.
          Section               40-4-202(l),             MCA, is           a     flexible        statute          vesting

                                                               11
district                 courts             with          wide          discretion                       for         distributing                        marital

property.                  In        re     the          Marriage              of       Stewart,                232 Mont.                    40,        757       P.2d

765.          There            is     no set             rule        concerning                   how an inherited                              asset            is    to

be divided.                         Stewart,              757 P.2d               at        768.

             In    addition                 to     the         broad          discretion                  given             to         District             Courts
concerning                 property                 division,                  they           also        have          broad             discretion                    in

providing                for         support             for      children.                    In dividing                     marital              property,

the        court         may take                  into         account               child          support                considerations                            and

may        protect              and         promote               the        best            interests                  of        the         children                 by

setting            aside            a portion               of jointly                  and separately                           held        property                 for

support             of      their            children.                      In        re      Marriage                 of        King           (1985),               216

Mont.         92,        700 P.2d                 591.

            Mrs.          Mischke                testified                  that           she       was         unemployed                       except              for

part-time                piano            instruction                   and could                  not         afford             to      pay       any        child

support            for      the        two minor                children.                     She further                    testified                  that          she

intended            to provide                     for      their           support               from         the     proceeds                 of the            sale
of     the        family             home.               Instead            of        ordering             a sale                 of      the       home,             the

District             Court            awarded              a larger                share          of the             marital              estate            to        Mr.

Mischke,             which            was to              be considered                       a lump            sum settlement                           in       lieu

of     child         support                from          Mrs.        Mischke                 and which                 relieved                  her     of          all

future            support              obligations                    for        the        children.

             Considering                    the           facts         of          this          case,          we          conclude                that             the

District             Court            did        not       abuse         its          discretion                 by awarding                       52% of             the
marital            estate             to Mr.             Mischke             and 48% to Mrs.                           Mischke.                    We further
conclude             that            the         District             Court             did       not          abuse           its        discretion                    in

awarding             a larger                    share          of      the         marital              estate              to        Mr.        Mischke               in


                                                                                   12
lieu    of    monthly             child        support           payments.

        We hold            that       the      District               Court     did      not     err         in    distributing

52%    of    the      marital             estate          to    Mr.    Mischke           and 48% to               Mrs.     Mischke.

        Pursuant            to       Section         I,        Paragraph         3(c),         Montana            Supreme         Court
1988 Internal               Operating              Rules,         this        decision         shall         not     be cited         as
precedent           and shall             be published                by its      filing         as a public               document

with    the        Clerk        of    this         Court        and by a report                 of     its        result      to    the

West    Publishing                Company.

        Affirmed.




We Concur:



              Chief        Justice




                                                                       13
                                         February 2, 1993

                                  CERTIFICATE OF SERVICE

I hereby certify that the following order was sent by United States mail, prepaid, to the following
named:


James C. Bartlett
HASH, O’BRIEN & BARTLETT
P.O. Box 1178
Kalispell, MT 59903

R.M. KEHEW
Attorney at Law
P.O. Box 5427
Kalispell, MT 59903-5427


                                                     ED SMITH
                                                     CLERK OF THE SUPREME COURT
                                                     STATE OF MONTANA
