Devine Millimet | NH Law Firm

In re Greenberg: NH Supreme Court Says Vested Restricted Stock IS Income for Child Support Purposes

Article by: Cory D. N. Greenleaf

On March 24, 2021, the New Hampshire Supreme Court issued an opinion, In re Greenberg, to decide the issue of whether a father was required to pay additional child support to the mother after obtaining shares of vested restricted stock from his employer.  

The parties entered into a final divorce decree in December 2015. The decree stated that the father would pay “28% of any bonus he may receive [from his employer] within 3 days of receipt” in addition to regularly monthly child support. The decree awarded the father “any stock options” he received from his employer free from the mother’s interest. The father’s employer, a publicly traded company, awarded him 5,000 shares of stock in June 2015. None of the shares had vested at the time of the 2015 divorce.

As of 2019, the father netted a total of $324,856.63 following the sale of his vested restricted stock. The Internal Revenue Service treated the stock as taxable income. The father did not include the shares in his Financial Affidavit to the court, nor did he inform the mother regarding the sale of his restricted shares or pay any of the proceeds as child support.

In May 2019, the mother motioned to modify child support based on a suspicion that the father had a significant increase in wealth since the divorce decree became final in 2015. The trial court determined that, in accordance with the 2015 divorce decree, the father was obligated to pay $90,959.58, which represented 28% of his $324,856.63 derived from the sale of his vested stock.

On appeal, the father argued that, because he has not yet liquidated his restricted shares, it cannot count as “income” for child support purposes. While the Court agreed that assets, like shares of stock, are not considered “income” for the purposes of calculating child support pursuant to N.H. RSA § 458-C:3, the Court reasoned that liquidity is not conclusive as to whether something is characterized as an “asset” or as “income” for child support purposes. The Court determined that the father’s stock awards are part of his employee compensation package and are reportable income for child support calculation purposes, despite whether or not he sold the stock. The stock awards, according to the Court, operate like a “bonus” with taxable value and meet the statutory definition of “income” for child support.

The Court affirmed the lower court’s findings and ruled that the father was required to pay $90,959.58 in overdue child support to the mother.

Next Post >
A Sense of Normalcy: New Hampshire Courts Reopen to the Public - By Cory D. N. Greenleaf
Disclaimer: This Blog/Website ("Blog") does not provide specific legal advice. It is for educational purposes only. Use of the Blog does not create any attorney-client relationship between you and Devine, Millimet & Branch, Professional Association or the author(s) of any posts. The Blog does not constitute legal advice and is not a substitute for competent legal advice from a licensed attorney in your state. Any links from another site to the Blog are beyond the control of Devine, Millimet & Branch, Professional Association and do not convey their approval, support, or any relationship to any site or organization.