Marriage can be hard. Spouses frequently disagree regarding how to spend their money. One spouse may be conservative wanting to save every extra dollar for the children's college fund, retirement or that "rainy day" fund. The other spouse may be more inclined to enjoy each day to the fullest by joining expensive clubs and taking exotic vacations. Inevitably, each spouse is totally positive he or she has the correct view of life and the other spouse is completely unequivocally wrong. The stress caused by differing financial views and outlooks often leads to marital breakdown. And spouses may naively believe divorce will alleviate their financial tension. Unfortunately, as hard as marriage can be, divorce can be even harder.
One of the most contested divorce issues is how to divide assets acquired during marriage. In other words, who gets what. The general rule is that marriage is an equal partnership with all assets acquired during marriage divided equally. A typical situation would be a relatively long marriage, perhaps ten to twenty years, with several children and two involved parents, one or both working and one or both participating in child rearing. In a typical situation there is no physical, mental or emotional abuse, none of the parties or children suffer from physical or mental health issues or have unique needs and the parties both contribute equally to the marital enterprise. In the real world, few marriages fit the typical model. Or maybe one spouse believes the marriage fits the model perfectly while the other spouse believes their marital situation is unique. Because so many marriage do not fit neatly into the general model, the exceptions can be more important than the general rule.
Even the general rules many not be obvious to everyone. These rules may make complete sense to some and make no sense to others. Most people understand a joint bank account in which both parties contributed is an asset that will be divided between the parties. Less concrete assets like a partnership interest, unvested stock options and the proceeds from a personal injury case can be harder to conceptualize and harder to understand how a Court will divide. Adams v. Adams, 459 Mass. 361 (2011) is a recent Supreme Judicial Court case in which the husband thought he was not obligated to divide his lucrative partnership interest because his wife had little involvement with the partnership business. With help from experts, the Court applied a complex formula to value the partnership interest and awarded half of the value to the wife finding the marriage was an equal partnership in which he worked and she raised the children. In Baccanti v. Morton, 434 Mass. 787 (2001), the Court made it clear a portion of unvested stock options a spouse owns at the time of divorce will be divided. The Baccanti case establishes a "time rule" for determining what portion of the unvested options belong solely to the option holder and what portion will be divided in the divorce. And the February 7, 2017 case Ludwig v. Ludwig, 15-P-1177 (Mass. App. 2017) clarifies the rule that income received from unvested options after they vest should be included in the calculation of alimony and child support if the options were not divided in the original divorce. Finally, in Dalessio v. Dalessio, 409 Mass 821 (1991), the Court divided the proceeds of a personal injury award one spouse received during the marriage.
For a variety of reasons, certain assets may not be divided in a divorce. Medical and law licenses are not assets subject to being divided in a divorce. Drapek v, Drapek, 399 Mass. 240 (1987). The grant of a patent is not an asset subject to being divided in a divorce. Yannas v. Frondistou-Yannas, 395 Mass. 704 (1985). Inheritances, trusts and other assets acquired prior to marriage or during a period of pre-marital co-habitation may not be subject to division, depending on the circumstances. Liebson v. Liebson, 412 Mass. 431 (1992) and Moriarty v. Stone, 41 Mass. App. Ct, 151 (1996). Inheritances, trusts and pre-marriage assets may be divided one spouse acquiring more than a 50% interest in that asset. Many states automatically exempt pre-marital assets for being divided in a divorce. In Massachusetts, all assets whether acquired before or during the marriage are included in the marital estate and subject to being split between the parties.
If you have questions, call Caren Z. Schindel at 508-655-1707 or email at cschindel@southnaticklaw.com
http://masscases.com/cases/sjc/459/459mass361.html
https://casetext.com/case/ludwig-v-lamee-ludwig
No comments:
Post a Comment