Divorce is never easy, and when it comes to dividing up what you own, things can quickly get complicated. If you’re going through a divorce in Massachusetts, understanding the asset division process can help you feel prepared and in control. The following are a few things to take note of when you are embarking on the divorce process:
Massachusetts is an “Equitable Distribution” State
Massachusetts follows an equitable distribution model. Instead of a 50/50 split, the court aims for a fair division of property based on a variety of factors, including length of the marriage, each spouse’s income and future earning potential, contributions to the marriage (both financial and non-financial), the needs of each party and custody of children, if any.
The Marital Home is One of the Most Important Assets in Divorce
The family home is often one of the most significant assets in a divorce. In Massachusetts, if the home was purchased during the marriage or used as a marital residence, it’s typically considered marital property, even if it’s only in one spouse’s name. During a divorce a court may order the home sold and divide the proceeds, award the home to one spouse and compensate the other with assets, or allow one spouse to stay in the home temporarily, especially if children are involved. The family home is not only one of the valuable assets in divorce, it can be the asset with the deepest emotional attachments. When you are dividing the family home in divorce, you need to approach the process with caution and care.
401(k)s and Retirement Accounts Must Be Divided in Specific Ways
Retirement savings like 401(k)s, IRAs, and pensions are subject to division in divorce. Even if an account is in just one spouse’s name, it may still be divided if contributions were made during the marriage. The portion earned during the marriage is usually considered marital property. A Qualified Domestic Relations Order (QDRO) is needed to divide a 401(k). If these specific steps are not taken, penalties can be incurred.
Stocks and Stock Options Can Be Complex to Divide
Stocks, stock options, and other investment vehicles can be more complex to divide. If they were acquired during the marriage—whether as part of compensation or investment—they are divided equitably. When stock options haven’t vested yet, the court may look at when they were granted, the purpose of the grant (e.g., reward for past or future work), the vesting schedule. When dividing stocks and stock options in divorce you need highly skilled legal and financial guidance to help you divide these assets.
Inheritance Is Not Always Separate Property
In Massachusetts, inherited property is not automatically considered separate property. However, the court may make exceptions. For example, when an inheritance was kept in a separate bank account and not used for shared expenses it’s more likely to be treated as separate property. If the asset was commingled (e.g., used to buy the marital home or placed in a joint account), it could be subject to division. In general, the court looks at whether inherited assets were integral to the marital finances. When an asset is inherited earlier in a lengthy marriage, the chance is higher that the asset could be counted as part of the marital estate.
Digital Assets Require Attention
In today’s world, digital assets can hold real value. Digital assets may include cryptocurrency (e.g., Bitcoin, Ethereum), online businesses or monetized social media accounts, digital intellectual property (e.g., eBooks, NFTs). Digital assets acquired or grown during the marriage are typically considered marital property. It’s important to properly identify, value, and disclose these assets during the divorce process.
Expert Guidance is Needed During the Asset Division Process
Every divorce has its own unique facts and circumstances, and deciding how to divide your assets in divorce is not a decision that should be made without expert legal guidance.
Cases with high net worth and complicated assets may requiring experts to obtain pension appraisals, calculation of marital coverture periods to determine what, if any part of a 401K or other retirement account does not get divided. There may be the need to hire a forensic accountant or Certified Divorce Financial Account, as well as other financial experts if there is a claim of hidden or dissipated assets.
We at Fleischer Law Solutions have a network of financial experts that we work with on a regular basis in high conflict cases. Contact Fleischer Law Solutions to schedule a complimentary phone consultation to discuss how we may help you with your divorce, post-divorce or other family law matter.