What kind of “property” will be divided in a divorce?

Most people are aware that real estate, bank accounts and furnishings are part of the “property” that will be divided in a divorce. But these aren’t the only ‘things’ that can be split (or traded for another asset) in divorce. Massachusetts law states that all property, however acquired and whenever acquired is “subject” to division, irrespective of title.

Here is an abbreviated list of the less-well-known types of assets which may be subject to division in divorce:

Retirement Assets. Pensions, retirement accounts, IRA accounts, Keough accounts, profit sharing accounts and other retirement-type accounts will be considered in property division. In the case of pensions and other “defined benefit” retirement type accounts, those accounts may need to be valued by an actuary if they are traded off for other assets. Note, however, that retirement assets are generally treated differently because they are “illiquid” and generally “pre-tax.” Social security benefits are not a divisible asset; however, they may be considered in other ways by the Courts in some circumstances.

Employment Assets. If you or your spouse has stock options, pre-tax dependent care plans or medical expense savings plans, deferred compensation, restricted stock, phantom stock, profit sharing or other benefits associated with employment, these may be subject to division. In the cases of future payments, some assets may be divided on an “if, as, and when” basis.

Inheritances, Expectancies, Trusts. If you or your spouse have or will receive an interest in an estate or trust or as a beneficiary, that interest may be considered as well. If a family member has recently passed away, and you are a named beneficiary/heir (or determined by law to receive distribution of the property when there was no Will)), these would be recognized as assets or future interests that may be divided or at least considered in your divorce.

Business Interest. If you or your spouse owns a business, the value of that business, if any, is likely to be divided or at least considered in your divorce.

Trademarks, Copyrights, Patents, Royalties are other interests which may be divided or considered in some way as part of your divorce.

Lawsuits and Legal Claims. If you or your spouse is a plaintiff in a lawsuit (or a potential plaintiff), any monies or assets flowing from your claim as plaintiff may be considered as an asset or interest to be divided in divorce. Similarly, a potential liability or legal claim against you or your spouse as a defendant is likely to be considered as well in your divorce. Monies due you or your spouse, or owed by you or your spouse, under a Promissory Note or other instrument may be considered as well.

Tax Assets or Liabilities. If you or your spouse has unused passive tax losses, tax carryforwards, or tax liabilities not yet paid (whether related to joint returns or separate returns), these may be considered in divorce. Similarly, tax refunds not yet received, or tax liabilities not yet paid, are also fair game.

Lottery Winnings. If you or your spouse hits the lottery, the winnings would be up for conversation on whether to divide.

Cash or Safe Deposit Box contents. Think you can salt away cash or jewels in a shoebox or safe deposit box and escape dividing it with your spouse? Think again. Cash, jewels and other valuables are divisible in divorce. If you fail to fully disclose these assets or interests on your Financial Statement, you can be prosecuted for perjury, and forced to divide the assets anyway. In addition, you may end up paying costs and attorneys fees of your spouse as a result of a misrepresentation by you, or attempt to conceal. Being forthright in your financial disclosures actually helps to protect you against a claim in the future made against you.

The attorneys at Ryan Faenza Carey will assist you in identifying all assets and liabilities relevant to a division of property in your divorce proceedings. Contact us today.

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