Rosenberg v. Rosenberg

ROSALYN B. BELL, Judge. Large fortunes beget large problems, which engender predictable issues when the holders of those fortunes enter the domestic relations arena. The issues referred to are labeled monetary award, alimony, custody/child support, counsel fees and costs. Only one of those issues is absent here, and that solely because of the age of the children.

Eleanor Kantor and Henry A. Rosenberg, Jr., were married on June 22, 1952, in Charleston, West Virginia. Their three sons are all emancipated. On November 1, 1981, Mr. Rosenberg left home with the purpose of ending the marriage. The divorce decree followed a lengthy and highly publicized trial and ended almost thirty-two years of marriage.

The chancellor found, in part, that Mr. Rosenberg was ⁴⁹⁴ “guilty of adultery on numerous occasions during their marriage and that [Mrs. Rosenberg] committed adultery on a single occasion in 1983, approximately two years after the parties separated. There is clearly no hope of reconciliation between the parties. In short, without even considering disputed grounds for a divorce a vinculo matrimonii, all the bases for a divorce a vinculo matrimonii on the basis of adultery or on the basis of a two year separation have been met.” Before going into the details of the Rosenbergs’ life together, it is important to look briefly at the family which is the source of this fortune. Rosenberg Family Background Louis and Henrietta Blaustein were survived by one son and two daughters: Jacob, Fanny and Ruth.

Jacob and his wife Hilda Blaustein had three children. Fanny married Alvin Thalheimer and they had one son. Ruth married Henry A. Rosenberg, Sr., and they had three children. Henry A. Rosenberg, Jr., appellant, was one of those children.

The American Trading and Production Corporation (ATAPCO) was started in 1931 by Louis and Jacob Blaustein. Louis Blaustein owned approximately 75% of the company’s stock and Jacob Blaustein owned the remainder. Upon Louis Blaustein’s death, most of his shares were transferred to his wife and three children. ATAPCO originally consisted of a little less than fifty percent interest in Crown Central Petroleum Corporation (Crown) and twenty-five percent in American Oil Company.

A subsequent merger of American Oil Company with Standard Oil of Indiana produced the large stock holdings of the latter company now held by ATAPCO. Most of the other family interests did not become a part of ATAPCO until much later. By the time the present case arose, ATAPCO had substantial gas interests, held interests in office and ⁴⁹⁵ commercial buildings, and had substantial manufacturing interests. Following the death of Jacob Blaustein in 1970, many changes were made in the operation.

Dr. Morton Blaustein, Jacob Blaustein’s son, assumed greater responsibility, and David Hirschhorn, son-in-law of Jacob Blaustein, became President in 1980. Louis Thalheimer, grandson of Fanny Thalheimer, joined the business at about that time and was involved primarily in the marine operations. During these transitions, appellant was the Chairman of the Board and Chief Executive Officer of Crown. ATAPCO continued to hold approximately 50% of the Crown voting stock and ATAPCO stock was owned wholly by family members. 1 Mr. and Mrs. Rosenberg In 1954, after a short stint in the service, appellant returned to work at Crown, where his father was President.

In 1955, his father died suddenly. To assist Mrs. Ruth Rosenberg, appellant and his family moved into the large family home, where they remained for two and one-half years. In 1955, appellant also became a director of Crown and Assistant to the President. His career continued to flourish.

He held the position of Vice President for Administration in 1959, in 1966 was elected the top officer of Crown, with the title of President, and assumed his present title in 1975. Appellant was elected to the Board of Directors of ATAPCO in 1961, and for more than twenty years, served as the only representative of the Rosenberg branch. When Jacob Blaustein died in 1970, appellant succeeded him as the ATAPCO representative on the Union Trust Board; ATAPCO is the largest shareholder in Union Trust Bank. Over the years, ATAPCO formed subsidiaries for its increasing ⁴⁹⁶ holdings, and appellant became a director of all but one of them.

In 1979, he served as one of four members of a special ATAPCO committee, known as the Long Range Planning Committee, which was organized for the purpose of modernizing the ATAPCO maritime fleet. In 1980, when ATAPCO created an Advisory Committee, appellant became one of its four members. The precise function of that committee was a point of controversy in this case; that is, whether it was to serve as a place to air family differences, as an Executive Committee of the Board, or something in between. Crown and ATAPCO prospered through the years and appellant’s income soared; his assets swelled, and he adopted and maintained an opulent lifestyle for himself, his wife and his family.

In 1983, his cash income exceeded $850,000, and his total annual income including noncash benefits was far more. ATAPCO provided him with free legal, accounting and investment services estimated at more than $50,000 for one year, and Crown supplied a new Cadillac automobile biannually. Crown and family foundations provided him with substantial resources for charitable giving. At the time of the divorce, the chancellor found appellant’s net worth was approximately $33 million.

Eleanor Rosenberg, appellee, shared her husband’s aspirations and made significant contributions to his success. Throughout the years of their marriage, appellee maintained a close relationship with all of the family members, including her mother-in-law and those who held leadership roles at ATAPCO. In addition, she did whatever she could to help further appellant’s success. For instance, in 1955, when the first two of the parties’ children were infants, appellant asked appellee to give him “his freedom” to pursue his business career.

The witnesses overwhelmingly agreed that she undertook virtually the entire burden of raising the children and of maintaining and managing the family household. Appellant admitted that the single-minded pursuit of his business career led him to neglect his wife and family; he absented himself from the home on week ⁴⁹⁷ ends and was even late for his 25th wedding anniversary party, a particularly sore point. Witnesses told of leaving the party before appellant’s midnight arrival and of appellee’s humiliation and embarrassment. During the marriage, appellee also entertained frequently for her husband’s benefit.

She routinely invited business associates and community leaders to their home for large parties and intimate dinners, and she served regularly as the hostess for Crown executives and their wives at community, social, charitable and political events. Appellee accompanied her husband to the meetings of the National Petroleum Refiners Association, an industry group of more than 1,000 members. When he was made Chairman of that organization, she headed the wives’ group and performed her duties skillfully, diligently and graciously. The parties owned and occupied a 20-room mansion, maintained by a staff of four, in an exclusive area of Baltimore.

Appellant also purchased and furnished two other homes at a combined cost of approximately $550,000. They vacationed frequently in the Caribbean, Mexico, Maine, and the ski areas of Colorado. On vacations and casual outings, they traveled in the Crown corporate jet which was at appellant’s disposal. Appellant’s largest asset, and that which experienced the greatest growth, was his ownership interest in ATAPCO.

Between September 1953 and July 1972, Ruth Rosenberg and Henrietta Blaustein (appellant’s mother and grandmother, respectively) had created a total of four trusts for the benefit of family members, including appellant. The trusts contained substantial amounts of ATAPCO stock. He also held a remainder interest in numerous trusts created by Louis Blaustein, subject to a life interest and power of appointment in Ruth Rosenberg. Over the years, the relationship between appellant and appellee deteriorated.

He found interests outside the home, as did she. A substantial difference, however, was that his ⁴⁹⁸ interests involved, at least in part, other women, while she became prominent in community and charitable enterprises. In the late 1970’s appellee began to abuse alcohol and prescription drugs. Appellant also abused alcohol, but did not suffer the same effects.

The situation reached a climax in July 1981, when she admitted herself to Springwood Hospital for drug treatment. He visited his wife at the hospital to announce that he was leaving home and to secure her signature on a separation agreement. She refused and then underwent a brief psychotic episode. As a result, her hospitalization was prolonged by about a month and a half.

After her discharge from the hospital, appellant remained in the marital home and continued his efforts to have her sign the separation agreement. He ultimately moved out on November 1, 1981. Trial Court Proceedings In 1983, Mrs. Rosenberg filed a Bill of Complaint for Divorce A Vinculo Matrimonii, alleging adultery, abandonment and desertion as grounds for the divorce. Mr. Rosenberg filed an Answer and Cross-Bill of Complaint for Divorce A Vinculo Matrimonii, relying on a two-year separation of the parties as grounds for the divorce.

The case came to trial in April 1984 and lasted approximately four weeks. The chancellor, in an opinion dated June 15, 1984, granted the parties a divorce a vinculo matrimonii and further ordered that 1. the wife be granted a monetary award in the amount of $1,750,000 to be paid as follows: $1,000,000 within sixty days of the date of the decree and the balance of $750,000 to be paid within one hundred twenty days from the date of the decree; 2. the husband pay to the wife alimony in the amount of $275,000 per year, at the rate of $22,916.66 per month beginning July 1, 1984, to cease upon her remarriage or the death of either party; 3. if the parties did not come to a buy out agreement concerning the marital residence located at 7709 Cross- ⁴⁹⁹ land Road and its contents within one hundred eighty days from the date of the decree, the house and all contents not included in an agreement between the parties to be sold at public auction; 4. the husband pay the wife’s attorney’s fees, within ninety days, in the amount of $430,390.53, but reserved its decision on the wife’s other litigation expenses pending further hearing; and 5. the husband to pay the wife’s court costs. Mr. Rosenberg moved to revise the judgment, claiming that the court made multiple errors in determining and valuing the marital property, and in granting the monetary award, alimony and attorney’s fees. The court, on July 13, 1984, issued a supplemental opinion in which it made additional findings that 1. the wife obtained her interest in the marital residence at 7709 Crossland Road and in the contents thereof through gifts over the years from the husband; and 2. the husband intended that the wife would be the sole owner of the jewelry he gave to her as gifts. and then amended its prior order to provide that 1. in the absence of an agreement, the proceeds of the sale of the house and its contents be divided equally between the parties; and 2. the husband pay to the wife a monetary award in the following manner: a) .$1,000,000 within sixty days from the date of this decree; b) $520,000 within one hundred twenty days from the date of this decree; and c) if the house and its contents are sold at public auction and if the wife’s share of the net proceeds is less than $230,000 the husband pay to her the difference between $230,000 and her share of the proceeds.

The day before the court issued its supplemental opinion, Mr. Rosenberg moved to stay the enforcement of the June 15th order for the payment of a monetary award, alimony ⁵⁰⁰ and attorney’s fees. On August 6,1984, the court issued an order addressing that motion and 1. stayed the payment of a monetary award upon the husband’s filing a supersedeas bond; 2. denied the requests to stay the payment of alimony and counsel fees; and 3. ordered that the parties’ marital home at 7709 Cross-land not be sold until sixty days after the husband has made full payment of the monetary award. Subsequent to that order, the court held a hearing on the wife’s litigation expenses. On September 5, 1984, it issued an order requiring the husband to pay $224,579.95 to the wife’s attorneys for those expenses.

Mr. Rosenberg moved to stay the order for the payment of litigation expenses, which motion was denied. Mr. Rosenberg appealed, raising what appears superficially to be just a few issues: “1. Did the Court correctly determine the amount of the monetary award? “2. Was the award of alimony in the amount of $275,000 per year, payable at the rate of $22,916.66 per month, excessive? “3.

Was the award of counsel fees in the amount of $430,390.53 excessive and wrongly charged to Appellant/Cross-Appellee? “4. Was the award of litigation expenses in the amount of $224,579.95 payable unto Appellee/Cross-Appellant’s attorneys excessive and wrongly charged to Appellant/ Cross-Appellee?” Within them, however, he raises a spate of additional issues under the general heading of monetary award. Also dissatisfied, appellee cross-appealed designating two issues: “1. Where a husband acquired interests in a family business through gifts and bequests, and where the value of those interests increased substantially over the course of the marriage, did the trial Judge err in holding that the ⁵⁰¹ increases could only be marital property to the extent that the wife proved that they resulted directly from the husband’s personal efforts? “2.

Where the wife proved that her husband had acquired interests in a family business through gifts and bequests, that the husband had operated a substantial part of the business pursuant to an agreement among family members to divide responsibilities and share the results of their common efforts, and that value of the husband’s interest had increased substantially over the course of the marriage, as a result of those common efforts, did the trial Judge err in declining to hold that the increase was marital property?” MONETARY AWARD Loans and Cash Advances to Dorothy Bohny. The chancellor meticulously catalogued the assets of the parties, designated the marital property and then valued it. Items of marital property included: (1) an interest-free promissory note from Dorothy Bohny 2 ; (2) the interest foregone on that note; and (3) the amount of various cash advances to Dorothy Bohny between June 2, 1982, and April 1, 1984. The chancellor found that these items dissipated the marital property and explained: “[T]he circumstances surrounding the loan to Mrs. Bohny indicate that [appellant] went to great lengths to conceal the transaction.

Had this loan been made in the normal course of business, interest would have been earned by the lender. [Appellant] conferred upon Mrs. Bohny the benefit of marital property monies, and by not charging interest on the loan, [appellant] gave to her money in which his wife had an interest. The $51,000. cash advances given to Mrs. Bohny also constitute dissipation of the marital estate. The Court accepts [appellee’s] argument and, for the aforesaid reasons, has included in its ⁵⁰² determination of marital property the value of the interest which would have been earned on the note and the value of the cash advances made to Mrs. Bohny by [appellant].” Appellant contends that the inclusion of the loan, interest and cash advances was error absent evidence that he intentionally dissipated the property. He argues, therefore, that the value of the marital property should be reduced by the amount of these items.

We will address the loan and the cash advances together and then discuss the interest. -Loans and Cash Advances- In Sharp v. Sharp, 58 Md.App. 386 , 473 A.2d 499 (1984), this Court stated that “[W]here a chancellor finds that property was intentionally dissipated in order to avoid inclusion of that property towards consideration of a monetary award, such intentional dissipation is no more than a fraud on marital rights ... and the chancellor should consider the dissipated property as extant marital property under § 3-6A-05(a) to be valued with the other existing marital property. This principle would apply even where the dissipated property cannot be recovered because it is in the hands of a purchaser who took in good faith, without notice and for value.” (citations omitted). Id. at 399, 473 A.2d 499 . We noted further that the inclusion of the dissipated property was consistent with the stated policy of adjusting the spouses' property interests fairly and equitably.

Id. The chancellor in the case sub judicé found that appellant had dissipated the marital property by making the loan and cash advances to Dorothy Bohny. We conclude that the evidence supports this finding and will explain. Appellant loaned $150,000 to Dorothy Bohny in 1981, after he informed appellee that he intended to end the marriage.

The transaction did not occur directly between ⁵⁰³ appellant and Bohny. Rather, appellant transferred funds to a Texas bank account, the bank delivered them to a Texas attorney, and the attorney transmitted the amount to Bohny. The promissory note provided that Bohny would repay the amount to Camac, Inc., a straw corporation utilized by appellant. When asked about the loan on deposition, appellant denied any knowledge of it.

The cash advances began in 1982 and continued into 1984, shortly before the trial began. The court’s findings are supported by the evidence. We hold the court was not clearly erroneous in including the loan and cash advances as marital property. Md.Rule 1086. -Interest- The promissory note stated on its face that -0-% interest would be paid on the loan.

The court included the interest foregone on the loan as marital property explaining that, if appellant had transferred the funds “in the normal course of business, interest would have been earned____” Thus, the lost interest was also a dissipation of the marital property. Interest is defined as “compensation for the use or forbearance of money.” Rosen v. United States, 288 F.2d 658, 660 (3d Cir.1961); See Candiano v. Moore-McCormack Lines, Inc., 407 F.2d 385, 387 (2d Cir.1969). Although interest will not be allowed if there was an obvious intent not to charge interest, 47 C.J.S., Interest & Usury, § 13 at 44 (1982), “[a]n award of interest [may be] made so that a person wrongfully deprived of the use of his money should be made whole for his loss.” Laminoirs v. Southwire Co., 484 F.Supp. 1063, 1069 (N.D.Ga.1980). Because the dissipation of marital property constitutes a fraud on marital rights, Sharp, supra, and the court noted that interest would have been accrued on an ordinary loan, appellee was wrongfully deprived of this gain on marital property.

We, therefore, hold the court did not err in including interest on the loan as marital property. ⁵⁰⁴ We disagree with appellant that interest-free loans do not result in constructive income to the lender. This point has no significance, however, in a situation where one spouse attempts to reduce the marital property through loans or gifts of property — the interest-free portion merely increases the amount dissipated. Appellant does raise a point that warrants scrutiny. He contends that if he had received the interest, it would have been subject to Federal and State income taxes of more than 50%.

The income tax consequences do not alter the value of the marital asset, but may merit attention. We will consider the effect of this factor hereafter when we address a similar issue raised by appellant concerning the value of his pension and retirement accounts, and forced sale of assets. Valuation of Pension and Retirement Accounts The marital property identified and valued by the chancellor totalled $2,886,509.40. A substantial portion of that figure came from various pension savings and retirement plans provided for appellant by Crown: Employee Stock Ownership Plan $13,712.00 Savings Plan 624,764.04 Pension Trust Agreement 169.800.00 Retirement Plan 767.943.00 Not surprisingly, appellant argues that these values are overstated.

Before we consider appellant’s various contentions, we need to look at the plans themselves. Crown Central Petroleum Corporation maintains five retirement plans: (1) an employee savings plan; (2) an employee stock ownership plan (ESOP); (3) an employee pension trust; (4) a retirement income plan; and (5) a supplemental retirement income plan. Each plan is categorized as either a defined contribution plan or a defined benefit plan, and all but the Supplemental Retirement Income Plan qualify for favorable tax treatment under I.R.C., § 401 et seq. (1983).

The Crown Employees Savings Plan and the ESOP are defined contribution plans. They provide a separate ac ⁵⁰⁵ count for each participant into which Crown makes specified annual contributions. Dunkle, Guide to Pension and Profit Sharing Plans, § 1.03 (1984); Fam.L.Tax Guide (CCH) ¶ 2502 (1985). Plan assets are invested, and the earnings and appreciation (or losses) on those assets are allocated to each account.

Id. At retirement, the employee is entitled to an amount equal to the cumulative value of his share. Id. The remaining plans — the Employees Pension Trust Agreement, the Retirement Income Plan and the Supplemental Retirement Income Plan are defined benefit plans.

The benefits in these plans are specified in advance, usually as a percentage of salary, and correlated with years of service. Dunkle, Guide to Pension and Profit Sharing Plans, supra; Fam.L.Tax Guide (CCH) ¶ 2503, supra. A separate account is not maintained for each employee. Id.

Rather, the employee’s present interest in the plan is derived from the amount of the pension promised at retirement. Fam.L.Tax Guide (CCH), supra. Under the four retirement plans which are “qualified plans” for tax purposes, I.R.C. § 401 et seq., supra, Crown is permitted to take income tax deductions for contributions, and interest may accumulate in the plans without being taxed. Dunkle, Guide to Pension and Profit Sharing Plans, supra.

The benefits provided to employees through these plans, however, are subject to dollar limits. I.R.C., § 415, supra. In 1982, the Tax Equity and Fiscal Responsibility Act (TEFRA) further reduced the annual benefit payable to $90,000 under a qualified defined benefit plan, I.R.C. § 415(b)(1)(A), supra, and under a qualified defined contribution plan to $30,000, I.R.C. § 415(c)(1)(A), supra. 3 Finally, in applying these limits, “all defined benefit plans ... of an employer are to be treated as one defined benefit plan.” I.R.C. § 415(f), supra. ⁵⁰⁶ The court determined that four of the five retirement plans constitute marital property for purposes of making a monetary award pursuant to Md.Cts. & Jud.Proc. Code Ann., § 3-6A-05 (1974, 1984 Repl.Vol.) 4 .

In finding that the fifth plan, the Supplemental Retirement Income Plan, was not marital property, it explained “The Supplemental Retirement Income Plan covers senior executives designated as participants by the Board of Directors. [Appellant] will not become eligible for this Plan until October, 1984, at the earliest, and at that time his coverage must be approved by the Board. As [appellant] possessed no right to participate in this Plan during his marriage, the Court finds that the Plan in no way constitutes marital property, even though the Board’s approval of [appellant’s] inclusion in the Supplemental Plan is almost guaranteed.” Appellant maintains that the court made multiple errors in valuing the retirement plans. Specifically, he asserts that: (1) the date of valuation the court used was in error; (2) the Crown Retirement Income Plan was overvalued, because the court adopted a method of valuation which erroneously included projected post-divorce salary increases and which did not take into account the TEFRA limits and offset provisions; and (3) the Crown Savings Plan and the Employee Stock Ownership Plan (ESOP) were overvalued because the court (a) did not consider the deferred income taxes he would incur upon realization of plan benefits; and (b) did not consider restrictions on ESOP distributions and fluctuations in stock value during the time distribution is prohibited. He concluded that the “compound effect” of these errors resulted in an excess valuation of the marital property of over one million dollars.

We will address these allegations in turn. ⁵⁰⁷ -The Date of Valuation- Appellant contends that the court erred in valuing the retirement and pension plans as of May 17, 1984, the date the trial ended, rather than on June 15,1984, the date of the divorce decree. In support of his argument he cites this Court’s holdings in Cotter v. Cotter, 58 Md.App. 529 , 473 A.2d 970 (1984); Gravenstine v. Gravenstine, 58 Md.App. 158 , 472 A.2d 1001 (1984); and Dobbyn v. Dobbyn, 57 Md.App. 662 , 471 A.2d 1068 (1984). In Dobbyn , we held that marital property is “to be valued as of the date of the decree of absolute divorce based upon evidence produced at trial.” Id. at 676 , 471 A.2d 1068 . We further stated that the court may reserve in the decree an additional ninety days to determine value.

Id. at 676-77 , 471 A.2d 1068 . Appellant interprets Dobbyn and its progeny to require that, in effect, the chancellor must make an independent valuation of the marital property subsequent to the trial. That interpretation is highly impractical, as illustrated in the recent case of Green v. Green, 64 Md.App. 122 , 494 A.2d 721 (1985). Judge Karwacki, writing for this Court, said: “Most applications of the Marital Property Act to the evidence presented at trial preclude an immediate decision by the court at the close of the evidence.

We will not, nor should we, encourage hasty decision making in such cases. On the other hand, unreasonable delays between the close of the evidence and the rendering of the judgment may in some cases cause distortion in the valuation of certain highly volatile marital property, resulting in prejudice to one of the parties ... [W]e point out that equity requires that reasonable efforts be made to ensure that valuations of marital property approximate the date of a judgment of divorce which includes a monetary award.” Id. at 140-41 , 494 A.2d 721 . In the present case, the court valued the marital property based upon the evidence produced at trial, and ⁵⁰⁸ only one month elapsed between the close of the testimony and the date of the decree. Under these circumstances, we hold there was no error.

Appellant further asserts that the court erred in valuing the Crown Savings Plan and the ESOP “as of May 11, 1984 ... by adopting the value shown in a Crown benefit statement of September 30, 1983.” He neglects to mention, however, that the benefit statement to which he refers was issued by Crown annually and the September 30 statement represented the most recent one available. No objection was raised by appellant to this value at trial. No more recent valuation was offered by appellant. He has preserved nothing to complain about.

We hold the court did not err in utilizing the September 30 valuation. Moreover, at a hearing on June 4, 1984, counsel for appellee attempted to offer evidence of more recent values — specifically a change in value of Standard Oil of Indiana stock and evidence of a plan to buy back 10.3% of the stock. On objection of appellant, it was not admitted. The real thrust of appellant’s complaint on valuation is directed at the projections of appellee’s actuary in valuing the Retirement Income Plan.

This involves the method of valuation, not the date, and we will consider that next. -The Retirement Income Plan- Appellant asserts that the court erred in two ways in determining the present value of his benefits under the Crown Retirement Income Plan. First, he complains that the method of valuation erroneously included “a speculative assumption that the Husband's salary would increase at a compound rate of 9.5% per year until age 65.” Second, he argues that the court failed to “apply properly the effect of TEFRA limitations and the offset provisions____” 1. Method of Valuation It is well established that “trial courts are presented with a complex task in properly valuing and allocating retirment benefits between former spouses.” Deering v. ⁵⁰⁹ Deering, 292 Md. 115, 129 , 437 A.2d 883 (1981). Whether the chancellor’s use of any particular method of valuation “represents an appropriate exercise of discretion depends, of necessity, upon the circumstances of the individual case.” Id. at 131 , 437 A.2d 883 .

Barr v. Barr, 58 Md.App. 569, 590 , 473 A.2d 1300 (1984); Harman v. Harman, 61 Md. App. 554, 571 , 487 A.2d 689 (1985). In the case sub judice, both parties presented expert witnesses, each of whom calculated the present value of appellant’s interest in the Retirement Income Plan. Appellant’s actuary utilized assumptions for mortality, interest and retirement age. Appellee’s actuary utilized these factors and further assumed that appellant’s salary would increase at an average rate of 9.5% until his retirement.

The latter assumption was derived from Crown’s statement of appellant’s salary history. The court accepted appellee’s proffered method of valuation. Before doing so, however, it discussed how Plan benefits are ascertained: “Benefits under the Crown Retirement Plan are determined by the application at retirement of pension credits earned each year to the highest average compensation earned by the employee for the thirty-six consecutive months prior to retirement. The Court’s valuation of [appellant’s] interest in the Retirement Plan at $767,943. takes into consideration only those credits earned by [appellant] between July 16, 1952, when he was first employed by Crown, and March 31, 1984.

All credits earned after March 31, 1984, are determined to be non-marital property of [appellant].” The chancellor then explained that appellee’s valuation method “[Utilizes actuarial assumptions of the Pension Benefit Guarantee Corporation mortality tables and interest rates and assumes [appellant’s] retirement age at sixty-five. The Court accepts the testimony of Robert Bolton, actuary, that in order to determine the present value of the ⁵¹⁰ credits earned by [appellant] to date under the Retirement Plan, these actuarial assumptions are necessary, as is a determination as to the thirty-six month highest average compensation against which presently earned credits will be applied. The Court accepts the statement of Mr. Bolton, who testified on [appellee’s] behalf, that it would be a reasonable assumption that [appellant’s] salary will increase at an average rate of 9.5 percent until his retirement, as the average annual rate of [appellant’s] salary increase has been 12.8 percent since [appellant] became Chairman of the Board at Crown.” Appellant’s benefits under the Retirement Income Plan will be derived from his highest average compensation for the three years prior to retirement. The court, therefore, utilized a valuation method which included an assumption that appellant’s salary would increase annually at an average rate of 9.5% until retirement.

We hold that the chancellor properly exercised his discretion in utilizing that approach. 2. TEFRA Limits Appellant claims on appeal, as he did at trial, that the TEFRA limits and offset provisions must be applied in calculating the value of his present interest in the Income Retirement Plan. The Crown Income Retirement Plan does qualify for favorable tax treatment under I.R.C. § 401 et seq., supra. As a result, plan benefits are subject to certain dollar limits.

I.R.C. § 415(b)(1)(A), supra. Additionally, this plan and the Pension Trust Agreement must be treated as one plan in applying those limits. I.R.C. § 415(f), supra. Nevertheless, the court found that “[t]he Supplemental Retirement Income Plan, the value of which has already been determined to be non-marital property, was created to provide [appellant] and other senior executives at Crown with the benefits TEFRA would have denied.

It would be incredible to this Court ⁵¹¹ for the [appellant], being a member of the family that controls Crown through its ownership of ATAPCO, to be denied by the Board of Crown membership in the Supplemental Retirement Income Plan when [appellant] reaches the age of fifty-five in October, 1984.” On that basis, it concluded that appellant’s argument that the plan valuation be limited by TEFRA had “no merit.” The record shows that appellant has an agreement with Crown concerning the benefits he will be paid upon retirement. This is evidenced by the annual Personal Statement of Benefits he received from Crown eight months before trial which provided in pertinent part: “Based on your current earnings and projected service, should you elect to retire on your normal retirement date at age 65, it is estimated that you will receive ... $17,454 a month from the Crown pension programs. $723 a month from Social Security. $18,177 estimated total monthly benefit.” (emphasis supplied). The statement indicates that based upon his current earnings, appellant will be entitled to receive $209,448 annually from the Crown Pension Programs, which include the Retirement Income Plan and the Pension Trust Agreement. The benefit statement and the existence of a Supplemental Retirement Plan indicate a means through which the company can provide accrued benefits that exceed the limits imposed by the Internal Revenue Service.

We hold, therefore, that the TEFRA limits and offset provisions are not relevant to a determination of the present value of appellant’s pension benefits. Furthermore, we point out that appellee established that appellant’s entitlement to retirement benefits exceeded the TEFRA limits. Appellant, on the other hand, failed to go forward and prove that his overall benefits would be limited by TEFRA. Thus, even assuming arguendo that these limits were relevant, appellant did not establish that Crown would not provide him the additional benefits. ⁵¹² -The Crown Savings Plan and the ESOP- Appellant next contends that the court erred in its valuation of the Savings Plan and the ESOP, because it did not “give any effect to the deferred income taxes which would be incurred upon realization of the benefits____” Even if the court should consider income tax in making a monetary award, it should not be included in the valuation of marital property.

Rather, income tax is considered as an “other factor.” Md.Cts. & Jud.Proc.Code Ann., § 3-6A-05(b)(9), supra 5 We will discuss this contention in greater detail when we reach the actual determination of the monetary award. Appellant also argues that, in assessing the ESOP, the court failed to consider: (1) the restrictions on distributions; and (2) the possibility of fluctuations in value during the time distribution is prohibited. The Crown Employee Stock Ownership Plan is a defined contribution plan which qualifies for favorable tax treatment under I.R.C. § 409A, supra. It is designed to be used primarily for purchasing Crown stock, which is then held in trust for the benefit of participating employees.

In a qualified ESOP, such as the one here, shares of stock allocated to each participant’s account must remain in trust for eighty-four months before being distributed, unless the employee dies, is disabled or is terminated. I.R.C. § 409A(d), supra. Neither of appellant’s contentions concerning the ESOP need detain us long. First, retirement plans, by definition, involve restrictions in one form or another.

Thus, the restrictions on stock distribution under the ESOP do not render this plan incapable of valuation as appellant implies. Furthermore, the probability of stock fluctuations while distribution is prohibited is speculative and not immediately ascertainable. The court, therefore, may ignore them in calculating the present value of the plan. See In ⁵¹³ Re Marriage of Marx, 97 Cal.App.3d 215 , 159 Cal.Rptr. 215 (1979).

Trust Interests — Non-Marital Assets -Remainder Interests- In 1934, Louis Blaustein (appellant’s grandfather) funded numerous separate trusts in which he gave appellant a remainder interest, subject to a life interest, and a testamentary power of appointment in Ruth B. Rosenberg. These trusts were not funded with ATAPCO stock. At trial, appellee’s experts testified that the total present value of the remainder interest in these trusts was just over $4.2 million. The court classified them as non-marital assets, because they were acquired by gift; it also accepted the $4.2 million valuation. -Life Interests- From 1953 through 1972, Ruth B. Rosenberg and Henrietta Blaustein (appellant’s mother and grandmother, respectively) each created two trusts naming appellant as lifetime beneficiary and his descendants as remaindermen.

All four trusts gave him a testamentary power to terminate the interest of any remainderman and to appoint any share, outright or in trust, to his descendants or certain other family members. Ruth Rosenberg created one trust in 1953 and the other in 1972. Henrietta Blaustein created a trust in 1953 and a second one in her will. She died in 1965.

In 1956, a stock dividend of three shares of newly authorized ATAPCO Class B Common stock was declared for each share of Class A Common stock. At the time of the divorce, the four trusts all contained Class A stock and the two 1953 trusts also included Class B stock. The chancellor valued the trusts at more than $26 million and appellant’s life interests at $24 million. In his opinion, he found these four trusts to be non-marital property, since appellant acquired them directly by gift or inheritance.

As will appear later, in more detail, appellee argued that the increase in value of these trusts should be considered marital property. ⁵¹⁴ -Valuation of Trust Interests- 1. Remainder Interests The chancellor found that the corpus of the Louis Blaustein trusts “totaled $7,279,160 as of June 30, 1983. [Appellant’s] remainder interests are subject to the rights of his mother to invade the principal during her lifetime and to exercise a testamentary power of appointment naming others remaindermen. [Appellee’s] expert, Mr. Bolton, by employing standard assumptions as to Ruth B. Rosenberg’s life interests and a 9.50 percent discount rate, concluded that [appellant’s] remainder interests were valued at $4,258,633, or 58.5 percent of the value of the corpus. At trial, Mr. Bolton recalculated using the more recent discount rate of 9.75 percent established by the Pension Benefit Guarantee Corporation. Using this higher discount rate, [appellant’s] remainder interests constituted 47.8 percent of the corpus, or $4,207,354.” The chancellor accepted appellee’s expert’s valuation and adopted the more recent figure provided as the value of the remainder interests.

Appellant contests the chancellor’s finding, asserting it was premised on the assumption that the interest was fully vested and freely transferable and assignable. He further asserts that the chancellor failed to consider that he could be divested of his remainder interests under all but one of the trusts if his mother exercised her power of appointment. Appellee points out, appropriately, that appellant failed to preserve any of these objections to the valuation by specifying the same amount in his Proposed Findings of Fact. Appellant now attempts to recant that inclusion and argues that “in accordance with his duty to try to expedite the trial he agreed that these interests would have had that value if they were not spendthrift interests subject to powers of appointment and withdrawal.” (emphasis supplied).

We view appellant’s position as implausible. At the time he made what he now claims was a concession, there had ⁵¹⁵ been no decision by the chancellor on the effect of the provisions. Furthermore, appellant made no corresponding effort “to expedite the trial” by conceding the values on those life interest trusts, which also carried spendthrift provisions. Additionally, he produced no evidence of an alternative valuation, but merely disagreed.

The issue was not preserved for appeal. Md.Rules 1085 and 1086. 2. Life Interests The chancellor found that when the trusts were created, the value of the shares held for appellant’s benefit totaled $674,400. 6 By December, 1983, the value of the corpus had increased to at least $26,065,841, of which appellant’s interest was $24,412,212. Appellant contends the chancellor erred in making this determination in that (1) he simply accepted the testimony of appellee’s witnesses on the valuation, and (2) he failed to recognize the controlling effect of the spendthrift provisions. 7 Appellant raises several specific complaints regarding the testimony of appellee’s actuary: the actuary ignored the actual income of the trusts; he improperly used an assumed yield; and he acknowledged that another method of valuing the life interests would result in the right to receive divi ⁵¹⁶ dends having a total value of more than the corpus.

In addition, appellant complained that another witness proposed a weighted average using alternative valuations, producing the value of $24,214,747 for the life interest. The chancellor issued a detailed and specific opinion concerning this valuation: “Mr. Gill’s calculation of the value of [appellant’s] trust holdings in ATAPCO included a discount of thirty-five percent, taking into consideration the customary rate for their status as a minority share in a closely held corporation. Mr. Friedman, on the other hand, felt the Class A shares should be discounted by forty-four percent and the Class B shares by forty-six percent, basing these percentages on prospective sales to outsiders. The Court accepts Mr. Gill’s valuation of [appellant’s] life interests in the trusts.

Mr. Gill used two methods for calculating [appellant’s] life interests: First, he used actuarial methods and assumptions for dividing value between life and remainder interests, and the second method he used was based on determining the present value of the income which would be derived from the trusts during [appellant’s] lifetime. “Mr. Robert Bolton provided the actuarial assumptions for the first method. Mr. Bolton found that [appellant’s] life expectancy is 23.786 years and that a discount rate of 9.5 percent would be reasonable. The resulting conclusion from the use of these figures is that [appellant’s] life interests were approximately 80.6 percent of the total value of the trusts, or $21,009,068. “The second method used the same life expectancy and discount rate as the first and considered ATAPCO’s history of an increase in dividends at the rate of twenty percent per year. This method, assuming the same rate of dividend growth, determines the present value of the income to be derived by [appellant] to be $33,831,786. “Mr. Gill weighed these figures, having concluded that the second method was somewhat less precise than the first because it required a projection of future dividend ⁵¹⁷ income.

He gave the first method three times more weight than the second, less precise, method, concluding that the value of [appellant’s] life interests is $24,214,747. The Court accepts his conclusion and finds that this figure was derived through fair and reasonable methods.” Appellant’s fundamental complaint is that the chancellor was not persuaded by his experts. That does not constitute error. Barr v. Barr, 58 Md.App. at 589, 473 A.2d 1300 .

In his reply brief, appellant reasserts his earlier complaints and suggests as an additional position that the evidence adduced on behalf of appellee was “inherently incredible.” He neither challenges the qualifications of appellee’s witnesses as experts, the relevance of the testimony, nor presents any ground upon which the testimony should have been ruled inadmissible. Thus, it becomes an issue of persuasion. As a last resort, appellant suggests that the chancellor’s acceptance of this testimony was arbitrary and capricious. We need only refer to the chancellor’s opinion just quoted as support for our disagreement. 3.

Spendthrift Trusts In Smith v. Towers, 69 Md. 77 , 14 A. 497 (1888), the Court held spendthrift trusts valid in this State. Generally, income from this type of trust remains beyond the reach of creditors of the beneficiary of the trust. Safe Deposit & Trust Co. v. Robertson, 192 Md. 653, 659 , 65 A.2d 292 (1948). The definition appearing in Black’s Law Dictionary 1256 (rev. 5th ed. 1979), describes a spendthrift trust as “[a] trust created to provide a fund for the maintenance of a beneficiary, and at the