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Equitable distribution

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Equitable distribution

Complex property division in Massachusetts divorce cases

The issue of property division often becomes contentious in Massachusetts divorce cases, and this is especially true when the assets involved are significant. Assets such as stock portfolios, artwork and real estate are often difficult to divide equitably, and sometimes reaching an understanding regarding their value is challenging. Experts may be called upon to assist with such valuations, but even experts sometimes find an agreement elusive. Massachusetts law requires marital property to be divided equitably, but that does not mean all assets must be allocated equally between the spouses. In many cases, the primary residence will not be sold, and the spouse who remains in the home will receive a smaller share of other assets. The unpredictable nature of appreciation is another consideration, and discussions about the division of assets that are expected to increase in value may become antagonistic. When an agreement can not be reached, a judge will decide what is fair. If you are contemplating a divorce, you may have concerns that go beyond how assets will be divided. Investments are often highly complex in nature, and you could face taxation issues if they are liquidated before maturity. You may also have concerns about business holdings if dividing stock equally would impact your ability to run a company effectively. Our extensive experience in high net-worth divorce cases makes us familiar with these issues, and we help our clients to remain focused on pragmatic considerations while we provide strong advocacy to protect your interests. If you are considering

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The tax filing implications of divorce

Divorcing couples in Massachusetts must take the time to work through their assets and determine how the property will be divided. In addition to deciding what will be done with the family home, couples must also take time to review how income taxes will be handled. This is particularly important if there are minor children who can be claimed as deductions. The first thing to remember is that filing status is guided by very clear rules. Before the divorce is finalized through the courts, couples can either file as married or married filing separately. Filing status is determined by the marital status as of December 31. An alternative to filing as married is to claim head of household status if the qualifications are met, and this can help bump some divorcees into a more favorable bracket. Dependents are claimed by the person that they lived with throughout most of the year. This is usually the custodial parent. In the case of shared custody, the parents should agree ahead of time on which partner will claim the children. There are many divorces where the non-custodial parent covers the medical cost for their children. Those costs can be deducted even if the custodial parent is claiming the exemption for the child. Alimony payments may be deducted even if the individual does not normally itemize deductions, but the payments must be made in cash and classified as alimony in the divorce agreement for the IRS to allow the deduction. Working through the tax

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The issues that stock options present in a divorce

Massachusetts residents who are contemplating a divorce may be interested in one issue that often accompanies the process. When a couple spits up, certain types of stock owned by one of the parties may present problems that others do not. Restricted stock is a type of stock that is usually given to an employee for no cost, but only becomes transferable after certain conditions are met. This could include working at the company for a certain amount of time, among other possible terms. On the other hand, stock options are a type of compensation that allows the holder to purchase a certain amount of stock at a set price, but at a later date. This often results in acquiring the stock at a lower price. When one spouse owns, or claims to own, one of these types of compensation, these can present complex property division issues. The first step to take when dealing with these assets is to make sure that they actually exist. This may require an attorney inquiring about options and restricted stock with the company’s human resources department. The worth of the stock should then be determined, which may be difficult if the shares are not publicly traded. After the value is determined, the non-owning spouse should be sure to get an equitable distribution of the shares. If the shares are not given as part of the divorce, assets equivalent to the value of the stock should be their replacement. A contentious high net-worth divorce often brings

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Addressing complex property concerns during a divorce

While many Massachusetts divorces can be contentious as property division is discussed, some situations are more challenging because of the complex nature of marital and other assets. Business interests, stocks, real estate, and other issues may require particularly careful analysis to determine value and status as marital or separate assets. Those of you who hold executive positions, own your own companies or have a high net worth may find these issues to be particularly significant during divorce proceedings. An effective approach to property division begins with accurately valuing assets. Tax consequences should also be considered as certain funds are evaluated. In addition to determining the value of retirement resources, professional bonuses, stock options, and bank accounts, it is important to evaluate collectible items, antiques, and other physical belongings of value. Real estate and closely held businesses should also be evaluated. With an accurate value of the marital estate, it is possible to work toward setting attainable goals related to the property division phase of the divorce. The principle of equitable distribution is a guiding factor through this process. A fair division of assets is often determined by a judge, meaning that it is important to present a convincing argument for your wishes with regard to complex assets. It may be a priority to define certain properties as separate during this phase. A prenuptial agreement may also play a significant role in determining how marital assets are to be divided. If you are facing challenges related to high-value or complex assets

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Courts consider several factors in marital property division

Massachusetts law provides some specific guidelines for the court’s consideration regarding property division in a divorce proceeding. Since Massachusetts is an equitable distribution state, the court is charged with facilitating a settlement that is deemed fair to both parties. This approach differs from a community property division in that “fair” may not necessarily mean “equal.” When a mutually satisfactory division of assets cannot be reached in a divorce proceeding, the court first must determine what assets and debts are to be considered marital property. It must then proceed with an appropriate valuation of that property. Once the property is valued, the court then issues a ruling setting forth a division of property deemed to be equitable. Several factors must be considered by the court in its decision. These factors are defined by Massachusetts statutes, including the length of the marriage, the conduct of the parties during the marriage, the age, health, station and occupation of the parties, the amounts and sources of income, vocational skills and future earning capacities, employability, estate, the liabilities and needs of each party and the amount and duration of any alimony awarded. Additionally, the present and future needs of dependent children must be considered. The court may also consider each party’s contributions with regard to the respective estates, the contributions of each party as homemaker and other specific considerations such as health coverage. The stress of a divorce proceeding can be considerable. Seeking the advice of a family law attorney may help to facilitate the

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Division of marital property in Massachusetts

During a divorce proceeding, distribution of marital property can be a complex process. Massachusetts has established statutes regarding property division of various types of assets. Fair distribution of assets, including alimony, health insurance and business values, is ultimately determined by the court. The division of marital property has tax consequences that must also be considered by both parties. In addition to one party paying alimony to the other, the commonwealth’s courts may also order that one spouse pay for vested and non-vested retirement accounts, investments made together and funds earned during the marriage. Other assets that the court may assign to be distributed include retirement accounts, military and veteran’s pay and pensions, private pensions, profit-sharing ventures, annuities, deferred compensation and insurance settlements. Determination of equitable distribution also includes physical property or the property’s value. When performing a complex property division, the court takes into consideration the needs of dependent children. Additionally, it factors the ability of each party to earn a living, the contribution that each spouse made to the household income and the contribution that each made in running the household. The values of shared assets must be verified when marital assets are distributed during a divorce. The values of personal property, any jointly held business, land, homes and other valuables may be a contentious issue between the two parties. An attorney can help with a thorough investigation and analysis to ensure that their client receives an equitable distribution of marital property at the moment of the divorce and

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Dividing property after a divorce

If a divorcing couple has not settled their division of assets through a signed Marital Settlement Agreement in Massachusetts, the issue is left to the courts. Massachusetts is an ‘equitable distribution” state, meaning that if the parties cannot agree on how to divide their assets and debt, the Family Court within the Judgment of Divorce will award property based on what is deemed to be fair. It is important to know that ‘equitable” and ‘fair” are not synonymous with a 50-50 split of marital debt and assets. When determining how much each party gets, a number of factors will be taken into consideration. These factors include the income of each party and their current occupations, vocational skills and potential to be hired. Each party’s health and age are also taken into consideration. The length of the marriage and the behavior of each spouse throughout are also used when determining property division. To determine the assets and debt that must be divided, the Family Court will first determine which assets and debt are actually marital and assign dollar amounts. Once the monetary value is determined, property and debt will be assigned equitably. A divorcing spouse who has not been able to reach a settlement on property division without the court can benefit from a divorce attorney who can be a strong advocate. It is important that the judge has a clear idea of the spouse’s situation and that the spouse receives a favorable ruling. Source: Divorce Support, “Massachusetts Property Division Factors“,

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Equitable distribution and property division in divorce

One of the hardest aspects of divorce is the division of property between two spouses and understanding equitable distribution. Finances are often one of the major points of contention in a marriage, and this can carry over into the divorce process. It is beneficial for Massachusetts couples to understand equitable distribution and how this will affect their divorce process. During a divorce, a couple has the option to work together on an agreement that will dictate the division of assets and other aspects of dividing finances. This can be achieved through mediation and the assistance of each spouse’s legal teams. However, this amicable process is not always possible with every couple, and it may be up to the discretion of the court how property and assets will be divided. Equitable distribution is the division of property according to what the court deems reasonable or fair. This is based on spouse earnings, marital property, length of the marriage and more. It is important to remember that equitable division in no way guarantees that this process will be completely equal or reflect the wishes of the couple. For this reason, many couples choose to work on an agreement to divide their property. Determining how property should be divided is not an easy task. Because of the potential complexity of this process, it is beneficial to understand all options and how to pursue the optimal outcome from the divorce. Equitable distribution is one aspect of a divorce that may be confusing for Massachusetts

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Beyond equitable distribution: the financial impact of divorce

When facing a divorce, a Massachusetts couple will likely consider equitable distribution of things, such as which spouse will keep the house, child custody and spousal support. However, there is much more to the divorce process than just equitable distribution of assets and property. There are long-term financial consequences that should be considered by both parties when working through a divorce. A divorce can have a major financial impact on an individual and family. Before or during the early stages of a divorce, it is beneficial for both parties to gather the financial information all assets. This includes retirement funds, long-term savings, vacation properties and more. Organizing tax records can also expedite the process of determining child and spousal support. Massachusetts couples may not ever consider which spouse will carry the debt burden leftover from the marriage. This is especially important for a couple who has a large amount of debt from credit cards, medical bills or a mortgage. This may make it difficult to establish separate finances, but it can be done with the correct preparation and legal guidance. It should be noted that couples should clearly designate in a divorce settlement how retirement funds and other long-term savings will be divided. Separating finances is one of the most complicated aspects of a divorce. Equitable distribution is a common goal for many individuals facing a divorce, but the long-term impact of financial distribution should be carefully considered. When an individual enters the divorce process with clearly established goals and

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Property division in Massachusetts best left to prenup

Massachusetts residents considering divorce have many decisions to make. Some divorce proceedings are relatively simple, as there are no children or assets to consider, while other divorce proceedings require lengthy amounts of time attempting to determine the equitable distribution of property and other assets. Due to issues such as these, many couples have begun to consider prenuptial agreements. On June 5, 2013, in a post titled “A prenup can simplify Massachusetts property division“, we told our readers about the best ways to establish a prenup and be sure that it is valid. What many couples may not understand is that most states have a prenup of sorts already in place. Some individuals spend a significant portion of their years acquiring significant assets and building their careers. Once they make the decision to be married, many do not consider the possibility of that union dissolving. When a marriage does dissolve, regardless of the generosity of one spouse to the other, it is important their marriage end equitably. When there is no prenup, then it may be up to the state to determine what is fair and equitable, which may not be in the best interests of both spouses. When the state is left to divide property, regardless of how simple or complex the assets may be, a one-size-fits-most approach is used in place of a tailored plan designed to fit the needs of each spouse. The equitable distribution of assets is important to each individual’s financial future, which is one reason

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