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Stock properly classified for lump sum support award

The trial court correctly classified stock in a family real estate business as a gift from husband’s uncle and therefore as husband’s separate property, which was not subject to equitable distribution.

Further, there was no error when the court awarded wife a lump-sum support award of $1.3 million.

The stock

“[I]n order to establish the existence of a gift, [husband] was required to prove, by clear and convincing evidence ‘(1) the intention on the part of the donor to make the gift; (2) delivery or transfer of the gift; and (3) acceptance of the gift by the donee.’ …

“It is insufficient to show that the purported donor developed donative intent at some point during an exchange or transaction; rather, husband was required to establish that his uncle possessed ‘donative intent at the time of the [purported] gift[.]’ …

“The evidence was sufficient to support the trial court’s conclusion that the transaction represented a gift of the stock to husband. The testimony of husband, Enger, and Wagy amply support the conclusion that the transaction was designed as a means of carrying out uncle’s intent to give the shares of Long & Foster stock to husband.

“Their testimony finds further support in contemporaneous emails and other documents that describe the purpose of the transaction as ‘gifting shares to [husband].’ … [T]here is ample evidence to support the trial court’s conclusion that the entire transaction represented a gift of stock to husband alone[.] …

“[W]e note that, even if the transaction more properly is viewed as a loan, no different result obtains. Like assets, debt acquired during the marriage is presumptively marital, and that presumption similarly may be rebutted. …

“Here, the evidence and the trial court’s findings wholly support the conclusion that, however characterized, the transaction was outside of the marital estate. No marital funds were ever used regarding the transaction, and all of the participants were clear that wife was never intended to be part of the transaction.

“Furthermore, despite going to great lengths to reduce his tax liability, uncle knowingly incurred $14,000 in additional taxes by reporting the transaction as a gift to husband alone as opposed to a gift to husband and wife.

“Wife offered no evidence to counter the testimony or other evidence to show that uncle’s ‘loan’ to husband had a marital purpose; therefore, the record clearly supports the trial court’s finding that wife was not a participant in nor intended beneficiary of the transaction.”

Support

“Wife also challenges the trial court’s judgment regarding spousal support. Specifically, she contends that the trial court erred “in determining that an award of a lump sum, rather than periodic spousal support, was appropriate” and “in determining that the amount awarded as a lump sum for spousal support was adequate[.]” …

“[C]entral to the trial court’s decision was its conclusion that a lump sum award ‘would end the need for contact between the parties on anything to do with finances.’ The trial record amply supports that this was a valid concern and constituted a sufficient special circumstance to justify the decision to address support in a lump sum. …

“Although many, if not most, divorces result in acrimony between the divorcing spouses that makes dealing with one another difficult, the evidence here demonstrates acrimony and difficulty that is different in kind and not just degree than the average case.

“Wife made clear that even being in husband’s presence at trial was ‘triggering’ for her and caused significant mental and emotional hardship. To address wife’s concerns, the trial court conducted part of the trial with husband out of the courtroom and, when he was present, positioned a deputy so that wife would not have to see him.

“ Given that wife made clear that the mere sight of husband caused her great pain and anguish, it was reasonable for the trial court to fashion a spousal support solution that eliminated the need for future contact. Because alternative methods, such as periodic, automatic electronic withdrawals from husband’s bank account, leave open the possibility for future contact in ways that a one-time lump sum payment does not, the trial court reasonably concluded that such an alternative scheme was not the best solution.

“Because the trial court considered all of the relevant information and reasonably concluded that a lump sum spousal payment was in the best interests of both parties, it did not abuse its discretion. Accordingly, we affirm the judgment of the trial court to make a lump sum spousal support award.”

Amount

The court considered all the statutory factors in determining a one-time lump-sum payment of $1.3 million to wife for spousal support.

“In her challenge to the amount of the award, wife focuses on husband’s ‘present ability to pay spousal support’ and unspecified, largely unquantified needs of wife going forward. …

“[T]he record reflects that husband has substantial assets and income, and thus currently has the ability to pay spousal support. Of course, husband never disputed that he had the ability to pay spousal support or that he should pay spousal support.

“As the trial court noted in its letter opinion, husband ‘has financial resources exceeding six million dollars on top of a significant yearly cash flow. Thus, as [husband] himself concedes, he has the ability to pay spousal support.’

“Accordingly, the record reflects that, contrary to wife’s argument, the trial court did take into account husband’s current ability to pay.

“Wife also argues that the award failed to take into account her current needs. Again, the record belies this contention. In crafting the award, the trial court expressly considered wife’s specific needs. In addition to noting wife’s health/emotional issues, the trial court expressly found that wife ‘will need financial support and she will need it immediately’ in order ‘to buy a home and pay for its upkeep, maintenance, and utilities. She will also need further capital to pay for everyday expenses such as food, clothing, and the upkeep of her horse.’

“Clearly, the trial court considered wife’s needs in crafting the $1.3 million award, and nothing in the record establishes that the $1.3 million award is insufficient to meet those needs or to maintain wife in a lifestyle commensurate with the lifestyle of the parties for the majority of the marriage.”

Affirmed.

Foster v. Foster, Record No. 1141-21-2, June 21, 2022. CAV (Russell; Raphael concurring) From the Circuit Court of Albemarle County (Higgins). John S. Koehler for appellant. Juli M. Porto for appellee. VLW 022-7-212, 30 pp. Unpublished opinion.

VLW 022-7-212

Virginia Lawyers Weekly