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Santoro v. Santoro

A-0646-03T5 (N.J. Super. App. Div. 2005) (Unpublished)

CORPORATIONS; EQUITABLE DISTRIBUTION — Stock acquired by one party during a marriage is subject to equitable distribution so long as the stock was not a gift.

Prior to and during his marriage, a husband and his brother formed several corporations. The husband worked for the various corporation during the course of the marriage until he sold his stock to his brother. The brother later issued the husband stock in the corporations to the husband. When the husband divorced, the family court awarded half of the value of his stock in the corporations. The husband appealed, arguing that the stock was not subject to equitable distribution because it was a gift from his brother. He also claimed that the lower court erred in not considering the tax consequences that he would incur from the equitable distribution award.

The Appellate Division affirmed, finding that there was adequate evidence in the record to demonstrate that the stock was not a gift to the husband from his brother. There was no testimony presented at trial that indicated that the man and his brother shared a special type of relationship in which the brother would give the man stock solely as a gift. In fact, at trial, the brother appeared to be a very shrewd businessman who would not freely give away stock in his corporations. The Court further found that the lower court was warranted in not adjusting the equitable distribution award based on the tax consequences that the husband would incur because the man failed to present any evidence of tax consequences as required.

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