Gavin Howe
When it comes to divorce, one of the most important considerations is how property and assets will be divided. In the US, there are two main systems for property division: Community Property and Separate Property. Massachusetts is neither a Community Property state nor a Separate Property state. Instead, it follows an equitable distribution approach, where a fair division of assets is decided by the court, regardless of who owned the property. This means that assets are not necessarily split 50/50 between the divorcing couple.
| Characteristics | Values |
|---|---|
| Division of property | The court will divide a divorcing couple's property in a manner it considers fair, but not necessarily equally. |
| Marital property | All possessions and interests acquired by a couple during their marriage. |
| Separate property | Items that belong to one spouse individually and are considered separate from the marital estate. |
| Prenuptial agreement | A prenuptial agreement can define property or assets that are brought into the marriage and will remain individual property in the event of a divorce. |
| Equitable distribution | The court can decide on a fair division of assets, regardless of who owned them. |
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What You'll Learn
Massachusetts is not a community property state
In the world of divorce, property division can be categorized into two main systems: Community Property and Separate Property. Massachusetts follows neither of these systems. Instead, it employs an equitable distribution approach.
In a community property state, everything gets divided equally between a divorcing couple. Under this theory, marital property will be divided in a manner that the Judge considers a "fair" division, hence the term equitable. However, this does not mean that the couple's assets will always be split equally down the middle.
In Massachusetts, marital property is divided fairly, but not necessarily equally. The court will divide a divorcing couple's property in a manner it considers fair. The Massachusetts statute, Massachusetts General Law, c. 208, §34, lists several factors that either can be or must be considered by the court in determining how assets are divided. These factors include the estates belonging to each party and their contributions to preserving and growing those estates, the contributions of each party when one party is a homemaker, and the specific needs of each party, among others.
If the spouses can agree on how to divide their assets, they can create a property settlement agreement and submit it to a Massachusetts Probate and Family Court. The judge will then consider the agreement in the final divorce order. If the spouses cannot agree, a Massachusetts Family Court will divide the property on an equitable basis.
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Division of assets in a divorce
When it comes to the division of assets in a divorce, Massachusetts is not a community property state. This means that assets are not necessarily divided equally between the two parties. Instead, Massachusetts employs an equitable distribution approach, where a fair division of assets is decided upon, regardless of who owned them.
Marital property refers to possessions and interests acquired by a couple during their marriage. This includes jointly titled property, such as homes, bank accounts, and other assets held jointly. In a community property state, all of these would be equally divided between the divorcing couple. However, in Massachusetts, the court will divide the couple's property in a manner it considers fair, which may not always result in an equal split.
Spouses can also decide between themselves how their assets will be divided, and this agreement can be written out and included in the Separation Agreement, also known as a Divorce Agreement. If there is a prenuptial agreement, it can outline the distribution of specific assets, and those terms will generally be upheld. However, any prenup can be challenged in court. If the spouses cannot agree, the court will intervene, and a judge will decide on a fair distribution of assets.
In determining how assets are divided, the court considers several factors, including the estates belonging to each party and their contributions to those estates, the needs of each party, and whether one party was a homemaker. The court may also consider each spouse's separate property, such as assets acquired before the marriage, gifts, and inheritances. However, if separate property has been commingled with marital funds, it may be more challenging to claim it as separate.
Other assets that a party in a divorce may be entitled to include stock retirement accounts, pension plans, deferred compensation plans, capital losses, cemetery plots, collections with value, memberships, intellectual property, lottery tickets, loans, and travel rewards. If one spouse owns a business, it is essential to speak with a lawyer about how this may impact the distribution of property.
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Separate vs marital property
Massachusetts is not a "community property" state. This means that, in the event of a divorce, the court will divide a couple's property in a manner it considers "fair" and equitable, rather than equally.
"Marital property" refers to all possessions and interests acquired by a couple during their marriage. In most states, this is distinct from "separate property", which is generally considered to be assets acquired before the marriage, as well as gifts and inheritances received during the marriage. However, Massachusetts has opted to make all property owned by the spouses—no matter when or how it was acquired—subject to distribution in divorce. This means that, in Massachusetts, separate property can be divided between spouses in a divorce settlement.
If you are entering a marriage with any assets, it is a good idea to talk to a lawyer, even if you are not interested in entering into a prenuptial agreement. There are ways you can help assets you bring in retain an individual character, which will give them the best chance of being credited to you in the event of a future divorce. For example, if separate property ends up comingling with marital funds, the argument for why you should be credited the total amount of the value may be significantly decreased or removed.
If you are facing a divorce, it is important to understand how Massachusetts's divorce law addresses the division of property and allocation of debts. An attorney will ensure your interests are protected and provide the best possible outcome. Courts strongly encourage divorcing couples to settle all their marital issues before a trial is necessary and provide the opportunity to do that during the divorce process. You and your spouse always have the option of agreeing on how you'll split up your property, rather than having a judge decide for you. Once an agreement is made, it is written down as a "property settlement agreement" and submitted to a Massachusetts Probate and Family Court. Judges will almost always approve these agreements as long as they appear to be fair.
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Prenuptial agreements
Massachusetts is not a community property state, and the court will divide a divorcing couple's property in a manner it considers "fair" and equitable. This means that assets are not always split equally down the middle.
To be valid and enforceable, a prenup must meet certain requirements. Firstly, it must be reasonable and fair when initially signed and enforced (at the time of divorce). An oral prenup is not valid; it must be in writing and include a schedule of property current as of the date of the agreement. Under Massachusetts law, a prenup can address matters such as the characterisation of property, the division of property, and alimony/spousal support. However, it cannot limit or waive child support obligations or contain a "'lifestyle clause', where one spouse would lose certain rights based on their actions.
To ensure a prenuptial agreement is fair and complies with Massachusetts law, both parties should make a full and fair disclosure of their financial information, including assets, debt, income, and other interests. It is important to start the process early, so both parties have time to negotiate and review the terms with their attorney before signing voluntarily and without coercion. Having separate legal representation will increase the likelihood that the agreement is considered fair and reasonable.
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Equitable distribution
Massachusetts is not a community property state, and instead follows an equitable distribution system. This means that in the event of a divorce, a couple's marital property and assets will be divided in a way that is deemed fair, but not necessarily equal.
In a community property state, all possessions and interests acquired by a couple during their marriage are jointly owned and equally split between them. However, in Massachusetts, the court will divide a couple's property and assets in a way that is considered equitable, or fair, even if this means an unequal distribution. This could include business earnings and future royalty earnings, joint accounts, the value of the house, and vehicles.
Separate property in Massachusetts refers to items that belong to one spouse individually and are considered separate from the marital estate. This includes assets acquired before the marriage, and gifts and inheritances received during the marriage. While these are generally considered separate property, a judge can still divide this property between the spouses.
If the divorcing couple can agree on how to divide their property, this agreement can be written out and included in their Separation Agreement. However, if they cannot agree, a Massachusetts Family Court will divide the property on an equitable basis. This means that several factors will be considered to determine a fair division of assets, such as the contributions of each party, their specific needs, and the estates belonging to each party.
It is important to note that prenuptial or postnuptial agreements can also impact the distribution of property in a divorce. If a valid agreement is in place, it can outline the distribution of specific assets, and these terms will generally be upheld.
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Frequently asked questions
No, Massachusetts is not a community property state. This means that, if the court must divide property, assets, and liabilities, they are not necessarily divided equally between the two parties.
Massachusetts follows an equitable distribution approach. This means that marital property is divided fairly, but not necessarily equally. The court will divide the couple's property in a manner it considers fair.
Marital property refers to all possessions and interests acquired by a couple during their marriage. This includes homes, bank accounts, and other assets held jointly by both spouses.
Yes, prenuptial agreements can help protect your assets in the event of a divorce. If you have a prenuptial agreement that defines property or assets that you brought into the marriage, those terms will generally be upheld. However, it is important to note that any prenup can be challenged in court.
