Court Opinion

ID: 9739523
Source: CourtListenerOpinion
Date Created: 2023-08-26 20:16:52.483005+00
Date Added: 2024-06-11T07:24:12.816073
License: Public Domain

HOFFMAN, Judge,
dissenting.
I respectfully dissent from the majority's determination that the trial court abused its discretion when it subtracted potential tax liability from the value of HSD. By considering the tax consequences which would be incurred if Hal was required to sell his shares of HSD stock, the trial court was properly following the dictates of IND. CODE § 31-1-11.5-11.1 (1988 Ed.).
The majority construes IND.CODE § 31-1-11.5-11.1 as an endorsement of the common law existing at the time of its enactment. The common law respecting inclusion of tax liability in the valuation of the marital estate grew out of three cases: Wright v. Wright (1984), Ind.App., 471 N.E.2d 1240; In re Marriage of Mulvihill (1984), Ind.App., 471 N.E.2d 10; and Burkhart v. Burkhart (1976), 169 Ind.App. 588, 349 N.E.2d 707. From those cases, an approach developed whereby a trial court could consider tax liability if (1) the property disposition involved a mandatory transfer of assets or (2) the realization of tax consequences was inevitable regardless of the structuring of the property disposition. In all other instances, tax lability would be deemed a speculative and inappropriate consideration.
When it enacted IND.CODE § 31-1-11.5-11.1, the legislature was cognizant of this Court's position concerning the inclusion of tax liability in the valuation of marital assets. It is unlikely that the legislature merely sought to express its approval of this Court's rationale when the statute was adopted. IND.CODE § 31-1-11.5-11.1 is more reasonably construed as an attempt to effectuate a change in the common law.
The statute contains no limiting language, but provides that "[the court, in determining what is just and reasonable in dividing property ..., shall consider the tax consequences of the property disposition...." [Emphasis added.] Id. In accordance with that statute, the lower court in the instant case took into account the tax consequences of selling stock in HSD. The fact that a transfer of stock was not mandated by the property disposition is no longer a relevant consideration. Moreover, the tax liability discerned by the trial court is no more speculative than the majority's assumption that Hal's income will remain at a level which will permit him to pay $2,378.12 per month without selling stock.
For the foregoing reasons, I dissent.