Property Division

Divorce mediation gets to a fair and reasonable division of assets and property in the fastest and lowest cost way possible. Massachusetts is an “equitable division” state for property division. This means that all property owned by both parties is subject to division in a divorce. Equitable division suggests a fair and reasonable outcome on division of assets given the facts and circumstances of the parties or family. This differs from “community property” states where title, ownership or a presumption of equal division can determine property division outcomes.

What property can be divided?

Massachusetts defines the “marital estate” very broadly. All property “whenever and however acquired” is subject to potential division. This includes homes, bank accounts, retirement accounts and pensions, investment accounts, business interests, stock shares, stock options, deferred compensation, vested and non-vested benefits and rights, trust interests, collections, frequent flier miles, inheritances, personal property, tax refunds, vehicles, artwork, jewelry, etc.

What about our home?

In MA divorce mediation, we will consider all options for disposition of your marital residence. These options include sale of the home at the time of divorce or by a specified future date, a buyout or refinance by either party at the time of divorce or by a specified future date, co-ownership for a defined time period or transfer of the home to one party.

What about our retirement assets?

More or less, any retirement asset other than Social Security can be retained by the owner, divided, or transferred to the other party as part of the divorce process. Defined contribution retirement assets including 401Ks, traditional and ROTH IRAs, 403(b) accounts, deferred compensation accounts, and similar assets can be divided or assigned to either party in your divorce. Defined benefit retirement assets including federal, state or municipal pensions (teacher, police, firefighter, or government worker), union pensions, and similar pensions can be divided pursuant to a Qualified Domestic Relations Order (QDRO). A QDRO is an order from a judge dividing a pension benefit pursuant to divorce.

How do we determine the value of our marital assets?

In divorce mediation, just like in a divorce courtroom case, the parties can use real estate appraisers, business valuation experts, pension appraisers, and similar individuals or organizations to help them value specific marital assets.

What are the general principles of asset division in a Massachusetts divorce?

In divorce mediation your asset division issues will be evaluated under the shadow of Massachusetts law. Chapter 208 of the Massachusetts General Laws requires that a judge consider the following factors when determining asset division: the length of your marriage, the conduct of the parties during the marriage, the ages of the parties, the health of the parties, the station in life or economic class of the parties, the occupations of the parties, the amount and sources of income of the parties, the vocational skills of each party, the employability of each party, the estate of each party, the liabilities of each party, the needs of each party, the opportunity of each party for the future acquisition of assets and income, and the present and future needs of the children of the marriage. In addition, a judge has discretion to consider: the contribution of each of the parties in the acquisition, preservation or appreciation in value of their respective estate, and the contribution of each of the parties as a homemaker to the family unit.

Some common themes apply to property division in MA divorces, although what happens in your particular case will depend upon your specific circumstances:

• In short marriages, the parties often retain what they had on the date of the marriage with an equal division of what they accumulated during the short marital period.
  In long marriages with or without children born, an approximately equal division of marital assets is a common outcome.
• Inherited or gifted assets could be subject to division after consideration of numerous factors including whether or not the inherited or gifted asset was woven into the financial fabric of the marriage, when the inheritance or gift arrived in the marriage, the prospects of the non-inheriting party for a post-divorce inheritance or gift, the length of the marriage, and other equitable considerations.
• Asset division should be also informed by tax considerations. Common divorce tax issues include potential capital gains taxes related to the sale of homes, taxes due on assets such as stock options or stock shares, capital gains taxes applicable to investments, the pre-tax nature of most defined contribution retirement assets, depreciation recapture related to rental properties, and the cost basis of non-retirement financial investments.

The divorce mediation process takes place under circumstances where both parties possess reliable and specific information about all aspects of the other party’s financial circumstances. In divorce mediation, both spouses will need to disclose all of their respective income, expenses, assets and liabilities. This disclosure will be included in a court-required document called a “Financial Statement”. The Financial Statement must be signed under the pains and penalties of perjury and each party must complete a Financial Statement as part of the divorce mediation process.

The goal of divorce mediation on the issue of property division is to arrive at an agreement that is fair and reasonable to both parties and will be accepted by a judge of the Probate and Family Court when you finalize your divorce.