Opinion ID: 1392624
Heading Depth: 1
Heading Rank: 1

Heading: The Stock

Text: With respect to the proceeds from the sale of the stock and the connection between those proceeds and the cash advanced by the wife to the husband before the marriage, the court had this to say: [T]hose contributions [by the wife] would have been, had they been made during the marriage, treated as marital assets. They would have been a contribution to or investment in the relationship. However, since the wife contributed $38,967 to the Husband prior to their marriage, then the equitable and rational approach would be to cause an equal amount in non-marital assets of Mr. Thomas to be treated as marital assets since they were expended for his benefit and to satisfy his legal obligations. Therefore, $38,967 of his non-marital assets would be treated as a marital asset for purposes of distribution. The stock [shares] were premarital assets to the extent that [there] were loans that permitted the purchase of those assets, particularly when those loans were made against non-marital assets such as the cash surrender value of the insurance policies or their loan values. Also since the difference between the option price and the market price at the time of the commencement of the marriage was greater than the fair market value or market price at the time the option was exercised, that would not be subject to equitable division of property. To the extent that marital assets were used in exercising that option, that would subject the proceeds of such stock sale to that equitable division. In any event, because of the consumption of $38,967 premaritally, for the benefit of Mr. Thomas, then of those total stock sales, $38,967 would be subject to equitable division. [Emphasis supplied.] The husband argues that to the extent the stock proceeds were non-marital assets they would not be subject to equitable division. We agree. In order to divide marital property on an equitable basis, two things must be done. First, the property must be classified as either marital or non-marital. Second, the marital property must be divided, not necessarily equally, but equitably under the principles elucidated in Stokes v. Stokes, 246 Ga. 765 (273 SE2d 169) (1980). The classifying of property as either marital or non-marital is not a discretionary function but is based on legal principles. The second part, the division of marital property itself, is of course discretionary based on a consideration of various equitable factors. The court was not permitted to treat a portion of the husband's separate property as marital property in order to satisfy his perception of the equities of the case. In doing so, he in effect imposed an equitable trust upon those funds to the extent of the wife's premarital contribution. [1] We will remand this issue to the trial court so that the marital aspect of the stock proceeds may be set aside for distribution. The court may then divide those marital proceeds as it sees fit based upon the usual equitable criteria.