## Facts

- Ruby E. Chenault and William C. Chenault married in 1971, both in their early 50s.
- Ruby asserted she entered the marriage with substantial separate assets, including cash, a home, and inherited Standard Oil of California stock.
- During the marriage, Ruby’s premarital home was sold and the proceeds were converted into liquid assets.
- Ruby presented evidence that she had significant premarital cash, including a Treasury note that matured and was reinvested during the marriage.
- Ruby’s inherited stock increased through splits and dividends; some shares were sold during the marriage, but she still owned 50 shares at dissolution.
- At dissolution, the trial court found Ruby held over $90,000 in cash and securities plus the 50 shares, but classified these assets as marital because Ruby did not adequately “trace” them to premarital or inherited sources.

## Issues

1. Under KRS 403.190, must a spouse claiming nonmarital property trace the asset solely through documentary proof with near mathematical precision?
2. May a court classify property as nonmarital based on credible testimony and reasonable inferences showing how premarital or inherited property was converted into the asset held at dissolution?

## Decision

- The Kentucky Supreme Court reversed the Court of Appeals and the trial court and remanded.
- The Court held that the lower courts applied an excessively stringent tracing requirement not required by KRS 403.190.
- The Court directed reconsideration of Ruby’s claimed nonmarital interests under a realistic evidentiary standard that can include testimony and reasonable reconstruction.

## Legal Principles

- Under KRS 403.190, property acquired during the marriage is generally treated as marital unless proven to be nonmarital (including property owned before marriage or acquired by gift or inheritance).
- The spouse asserting a nonmarital interest bears the burden to trace the nonmarital source into the property held at dissolution.
- Tracing does not require documentary evidence or near mathematical precision; credible testimony and reasonable inferences may establish the connection between the nonmarital source and the current asset.
- Courts should not impose evidentiary requirements that effectively defeat statutory protection of premarital and inherited property.

## Conclusion

The court rejected a documentary-only, near-exact tracing standard for nonmarital property and required lower courts to evaluate tracing under KRS 403.190 using credible testimony and reasonable inferences, then reclassify and divide the disputed assets accordingly on remand.


Chenault v. Chenault, 799 S.W.2d 575 (Ky. 1990)