The Court of Appeals in Powell v. Powell, focused on distribution of stocks acquired during marriage but after separation.

The trial court had distributed stock options and share equally until the separation, and after separation, the vested stocks were allocated and distributed to the appellee giving rise to this appeal.

The appellant essentially argued that the trial court should have also equally transferred to him the stocks that were vested after separation but before the final decree of divorce.

As a rule, upon entry of a final divorce decree, the court shall:

• Assign to each party his or her sole and separate property acquired prior to the marriage, and his or her sole and separate property acquired during the marriage by gift, bequest, devise, or descent. . .; and
• Distribute all other property accumulated during the marriage, regardless of whether title is held individually or by the parties in a form of joint tenancy or tenancy by the entireties, in a manner that is equitable, just and reasonable, after considering all relevant factors.

The evidence at trial had established that prior to separation appellee held in her name sixteen shares of IBM stock, and jointly owned another share with appellant. After separation but prior to divorce, appellee obtained an additional 165 IBM shares through an employment purchase plan authorizing stock acquisition in lieu of ten percent of her salary.

The trial court distributed equally the seventeen shares acquired prior to separation and awarded the balance of stock to appellee.

Appellant in turned argued that the trial court had erred in finding the majority of stock to be the “sole and separate property” of appellee and distributing them to her.

The trial court however had properly held both stock before and after separation to be marital property subject to equitable distribution.  However, the equities favored distributing the stocks vested after separation to the appellee as she has acquired those shares in lieu of her salary and compensation.  Moreover, the trial court noted that after separation, equity dictated distribution of those assets to the party who had generated those assets.

Thus, although the trial court had not called the vested stock after separation as sole and separate property, in effect, the trial court had distributed them as such.

There is a great deal of litigation focused on assets acquired after separation but before divorce. This case provides both precedent and guidance that the courts after separation find it more equitable to attribute those assets or funds to the source particularly if equities are even prior to separation, and parties have lived separate and apart, and more importantly have been financially self-sufficient.

Refer to our Washington DC Divorce Lawyer page for more details on this subject.