Gene and Gerri are in the middle of a contentious divorce case. Gerri knows that Gene bought valuable stocks during their marriage, using money from the couple’s joint bank accounts, but the portfolio is under Gene’s name only. Gerri wants to know whether she is entitled to ask the Court that some of the stocks be transferred to her as part of the divorce settlement.

In Massachusetts, stocks and bonds are expressly part of the marital estate, making them eligible for division. When dividing any marital property, the Massachusetts Probate and Family Courts use the standard of equitable distribution; here, equitable means fair, and not necessarily equal. The Court uses a sixteen-factor test, generally, to determine what is an equitable way of dividing property, and that same test will apply to these assets, as it does to all other real and personal, tangible and intangible property.

In some cases (mainly when the marriage is short-lived and there is little contribution by the other spouse to the stock-holder spouse’s acquisition and growth of the stocks) the Court may order that each spouse gets to keep the stocks and bonds held under his or her name.

In some other cases, the Court might order division of the stocks, after considering the contributions of the other spouse, the length of the marriage, and the needs of the parties, among other factors. The Court may consider and give weight to the parties’ actions in acquiring the stocks, investing prudently, and causing the appreciation in value of the portfolio involved—if one party was significantly better at this than the other and contributed significantly more in this regard, then the Court will give that fact great consideration.

Stocks are usually valued at the time of divorce. If the stock is readily sold on one of the stock markets, its value can be easily obtained and ascertained by the court. If the stock is not trading publicly, however, its valuation might be more difficult. A key example is stock held in a closely held corporation: one which is typically small, with few shareholders and no readily available market for its shares. Valuing stocks in a closely held corporation might require the use of an expert, such as an actuary.

If you have questions about stock and bonds or their valuation in your case, schedule a free consultation with our office. Call 978-225-9030 during regular business hours or complete a contact form here, and we will get back to you at our earliest opportunity.