Summary
The North Carolina Court of Appeals considered whether post-separation passive appreciation of a marital stock account constituted divisible property in an equitable distribution proceeding. The court held that the trial court erred by failing to make findings regarding evidence of the account's post-separation value. The court vacated the equitable distribution order and remanded for reconsideration and possible further evidence.
Topics
Practice areas
Questions Presented
- Whether the trial court erred by failing to make findings concerning evidence of the post-separation appreciation of a marital stock account.
- Whether passive post-separation appreciation of marital property constitutes divisible property subject to classification, valuation, and equitable distribution.
- Whether the January 2024 account statement was too remote in time to be competent evidence of the account's value near the March 2024 hearing.
Holdings
- Passive appreciation in the value of marital property occurring after separation and before distribution falls within the statutory definition of divisible property and is subject to division between the parties if supported by competent evidence.
- The trial court erred by failing to make findings regarding Wife's evidence of the account's post-separation value.
- The January 2024 account statement was not too remote in time to be competent evidence of the account's value as of the March 2024 hearing.
- On remand, if the trial court finds Wife's otherwise competent evidence credible, it must classify, value, and distribute the post-separation increase; if it does not find the evidence credible, it need not classify the increase.
Key quotations
“"divisible property" is defined as: [A]ll appreciation and diminution in value of martial property and divisible property of the parties occurring after the date of separation and prior to the date of distribution, except that appreciation or diminution in value which is the result of postseparation actions or activities of a spouse shall not be treated as divisible property.” (at 4)
“However, if the trial court finds the evidence credible, the trial court must classify the post-separation increase, value it, and distribute it.” (at 6)
Factual background
The parties married in October 1992 and separated in April 2021. During the marriage, Husband opened an Edward Jones stock account in both parties' names; its value was $58,365 at separation. By January 2024, the account had increased to $184,737.50, and Wife offered the account statement as evidence that the approximately $126,000 post-separation increase was passive appreciation subject to classification and equitable distribution.
Procedural history
The parties married in 1992 and separated in April 2021. Plaintiff commenced an action seeking equitable distribution. After a March 2024 hearing, the trial court classified the value of a jointly held Edward Jones stock account at separation as marital property and characterized its post-separation appreciation as passive, but it did not make findings valuing or distributing that appreciation. Plaintiff appealed.
Remand instructions
The trial court must reconsider Wife's evidence concerning the post-separation value of the account. It may, in its discretion, receive further evidence. The trial court must assess the weight and credibility of Wife's evidence; if credible, it must classify, value, and distribute the post-separation increase as divisible property.