As part of the divorce process, the couples must divide their marital property and assign marital debts. Massachusetts law requires the division of property in a divorce to be equitable, meaning that it must be fair, which does not necessarily mean equal. Some couples are able to agree on their own about how to divide property while others seek the help of their respective attorneys or a mediator to assist them in negotiating a settlement. Those couples who cannot agree on this issue on their own will end up going to court to ask for a decision from a judge.
Marital Property and Separate Property
The marital estate subject to distribution consists of all property owned by either property, including pre-marital property. In Massachusetts, a Probate and Family Court is given the statutory authority to distribute property upon divorce, the extent of which is set forth in Massachusetts General Laws, Chapter 208, Section 34. Amongst other things, Section 34 provides that:
In addition to, or instead of, a judgment to pay alimony, the Court may assign to either spouse all or any part of the estate of the other, including but not limited to, all vested and non-vested benefits, rights and funds accrued during the marriage1 and which shall include, but not be limited to, retirement benefits, military retirement benefits if qualified under and to the extent provided by federal law, pension, profit-sharing, annuity, deferred compensation and insurance.
A party’s “estate” (as referenced above) is defined broadly to include “all property to which [he or she] holds title, however acquired.”1 As such, the commonwealth is unlike other “marital property” states that specifically exclude premarital property from the marital estate subject to distribution.2 In fact, assignable assets can even include post-marriage assets in certain circumstances.3 Generally, everything is “in the marital pot” for distribution upon divorce. The more interesting and varying question is how that marital pot will, in fact, be divided equitably between the parties.
A couple making their own agreement can divide assets however they see fit. Some couples have a prenuptial (premarital) agreements defining property as separate or marital and specifying how each of those kinds of property would be treated in the event of a divorce; if there is such a valid agreement, it can make dividing property much easier.
The divorcing parties by agreement (or the court if the parties cannot agree) assign a monetary value to each item of property. Appraisals can assist the spouses determine the value of real property as well as items like antiques or artwork. Retirement assets and business interests may be very difficult to valuate and may require the assistance of an actuary, C.P.A., business appraiser or other financial analyst.
Dividing the Property
The divorcing couples by agreement are free to divide property by assigning certain items to each party, or by selling an asset and dividing the proceeds. In some cases, the parties may agree that it makes sense to continue to hold the property together, but most couples do not because they want a clean break rather than an ongoing joint financial arrangement. For example, some people agree to keep the family home until children are out of school; others may keep investment property hoping it will increase in value.
The couple must also assign all debt accrued during the marriage, including mortgages, car loans, and credit card debts, to one spouse or the other.
If there is no agreement between the parties, the Court will decide how to divide the property and will take into consideration the following factors as they relate to each spouse:
- age, health, and station in life,
- occupation, vocational skills, and employability,
- amount and sources of income,
- liabilities and needs,
- opportunity for future acquisition of capital assets and income, and estate,
- each spouse’s contributions to the acquisition, preservation, or increase in value of their respective estates, and
- such spouse’s contributions to the family unit as a homemaker.
Other factors the Court will also give weight include
- the length of the marriage;
- the present and future needs of any dependent children of the marriage; and
- any spousal misconduct that caused the breakdown of the marriage.
Courts are especially likely to consider conduct (or, rather, misconduct) that caused the waste or dissipation of marital estate that may have been subject to division (such as, for instance, gambling or giving away large amounts of money without the other spouse’s consent).
There is no specific formula or a definition of what is equitable; since no two divorces are alike, every case heavily depends on the facts and circumstances. Generally, in shorter marriages, the more likely a court will be to try to put the parties back into roughly the same situations they were in prior to the marriage; in longer marriages, the courts are more likely to order a roughly equal distribution of property and to ensure that both spouses can maintain a standard of living similar to that conducted during the marriage.
1 Rice v. Rice, 372 Mass. 398, 400 (1977) (rejecting the husband’s contention that the trial court lacked authority to transfer his separate property acquired before the marriage to his wife upon divorce); see also Baccanti v. Morton, 434 Mass. 787 (2001) (upholding trial court’s inclusion of premarital assets in the marital estate, despite the husband’s testimony that the parties orally agreed to keep those assets separate); Drapek v. Drapek, 399 Mass. 240, 243 (1987).
2 See Moriarty v. Stone, 41 Mass. App. Ct. 151, 156-57 n. 4 (1996) (“The term ‘estate’ … includes property obtained by a party before marriage …”).
3 See Brower v. Brower, 61 Mass. App. Ct. 216, 218 (2004) (holding that assignable assets can include portion of teacher’s pension accrued after divorce).
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