The Lawletter Vol. 50 No. 3
Brett R. Turner, Senior Attorney
As I write this note, it is mid-October, there is a crisp cool snap in the air, and the college football season is in full swing. It is a good time to remember that in the United States of America, college football and college sports in general are very big business.
A reminder of this point in the divorce context is Waldrip v. Waldrip, 2025 Ark. App. 29, 705 S.W.3d 8. The parties in that case were members of the Razorback Foundation, which provides financial support for athletics at the University of Arkansas. The Foundation raises money, in part, by granting donors the right to purchase desirable seating at University sporting events. Those who donate to the Foundation are given priority points, and those with higher amount of points get more priority in purchasing desirable seating.
To obtain priority points in any given year, donors must contribute a minimum amount to the Foundation. At the time of divorce, the parties were platinum members of the Foundation, a status which requires a minimum donation of $20,000 per year. During their 41-year marriage, the parties contributed over $650,000 to the Foundation, accumulating 19,523.63 priority points. The parties' contributions were not unusually large for donors in the platinum classification—the husband testified that the parties were ranked only twentieth in their membership class.
The issue was whether the priority points were marital property. The trial court held that they were, and the husband appealed.
Marital property, in Arkansas and most other states, is property acquired during the marriage. Benefits which are not property, such as a professional degree, do not constitute marital property and cannot be divided. The husband argued that priority points were not property. But the chief financial officer of the Foundation testified that the Foundation keeps track of priority points, in order to assign the right to purchase priority seating. More importantly, she testified that the Foundation is willing to transfer priority points to an immediate family member if a donor dies, and that the Foundation would transfer points "if the Foundation is presented with a court order in a divorce." 705 S.W.3d at 11. The priority points did not disappear even if the donor failed to meet the minimum contribution in a year. The points continued to exist, although the donor would obviously lose position as against other donors who did meet the minimum contribution.
The court stressed a series of key points. First, the total investment in the points during the marriage was over $650,000. Second, the Foundation would transfer points in the event of death or divorce. Third, the Foundation kept track of points owned by its donors. Fourth, the Foundation believed that the points were "owned" by the person whose name was on the account. Fifth, donors keep their points from year to year even if they make no donations or purchase no tickets. These points were "sufficient evidence of an ownership interest in the Foundation priority points such that the circuit court did not clearly err in finding that they were marital property." Id. at 13-14.
The court's holding makes sense. The Foundation had to provide its donors with a reliable expectation of priority seating, or they would not donate such large amounts over such a long period of time. More generally, when divorcing parties spend over $650,000 during the marriage on a benefit, and the benefit administrator testifies that it will transfer the benefits upon divorce, the chances are good that the benefit will be treated as property.
