Source: http://keonfamilylaw.com/blog/classification-of-stocks-mutual-funds-and-a-closely-held-business-for-equitable-division-in-divorce
Timestamp: 2019-04-20 22:41:01+00:00

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Personal property owned by either or both spouses often includes ownership interests in family or other closely held businesses, as well as investment portfolios comprised of stocks, mutual funds, and bonds. The extent to which such business interests and investment portfolios constitute marital property subject to equitable division are matters which parties often contest on divorce.
While the above rules seem clear enough, their practical application often does not. The easier cases exhibit either a) appreciation in value of a closely held business due to the active management of an owner/officer spouse and the increase in value of an investment portfolio actively managed by a spouse, both of which plainly create marital assets, or b) business growth not contributed to by a spouse’s operation of the company and the increase in value of publicly traded stocks from market fluctuations, neither of which can qualify as marital assets.(6) Typically, the facts of a divorce case present less clear-cut scenarios.
Perhaps the murkiest question arises where an investment portfolio actively managed by a stockbroker or investment advisor appreciates in value. If such active management, rather than pure market forces, causes the increase in value, can that increase be considered an appreciation in value resulting from the individual or joint efforts of the spouses? No published appellate decision in Georgia has yet addressed this issue. The answer to the question likely will depend on whether a court deems the actions of a spouse’s agent as efforts of the spouse. Plausible arguments seemingly could justify either result. While a party certainly could argue that marital property should not result from the efforts of anyone other than a spouse, a party could also rationally assert that the hiring of a stockbroker to actively manage a portfolio evidences an effort of a spouse which ultimately results in the appreciation in value of the portfolio.
(1) Payson v. Payson, 274 Ga. 231, 231-232(1), 552 S.E.2d 839 (2001); Thomas v. Thomas, 259 Ga. 73, 74-75, 377 S.E.2d 666 (1989); Halpern v. Halpern, 256 Ga. 639, 352 S.E.2d 753, 754 (1987). (2) Payson, supra, 274 Ga. at 232; Halpern, supra, 352 S.E.2d at 754. (3) Id. (4) Id. See also Highsmith v. Highsmith, 289 Ga. 841, 842-843(1), 716 S.E.2d 146 (2011); and Bass v. Bass, 264 Ga. 506, 507, 448 S.E.2d 366 (1994). (5) Highsmith, supra, 289 Ga. at 842-843(1); Bass, supra, 264 Ga. at 507-508; Halpern, supra, 352 S.E.2d at 754. (6) Sullivan v. Sullivan, 295 Ga. 24, 757 S.E.2d 129, 133(3) (2014); Payson, supra, 274 Ga. at 233.

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