While the topic of gifted and inherited assets associated with a divorce is not a new topic in Massachusetts, I have recently noticed a surge in interest in the subject. So it is time to treat this issue again.
Do you know what happens if your child is divorced? While the topic of gifted and inherited assets associated with a divorce is not a new topic in Massachusetts, I have recently noticed a surge in interest in the subject. So it is time to treat this issue again.
What You Should Know About Inherited Assets If Your Child Is Divorced
Some attorneys will flat-rate a client – whether that client is a party to divorce or the parent of a child who is divorcing their spouse – that gifted and inherited property is not an asset that the Massachusetts court may in a divorce case. Lawyers making such a simple statement are wrong because it is not an easy problem.
Whether or not the interest on which the court is concerned is vested or not is a critical element in analyzing whether or not the gifted or inherited property is a divisible marital property.
Once a portion is vested, it can be considered a marital asset subject to division in a divorce. How the asset is divided, however, is a matter of negotiation or the decision of the fact finder (the judge) in court.
On the other hand, there remains the question of a future interest in the property of one of the parents by will or estate plan. In contrast to a present – non-forfeitable – interest, an expected gift or inheritance in the future is considered a Expectation. It is, and the name suggests, something a child can do expect to be received at a later date when the conditions for receiving the gift or inheritance (usually the death of the donor and the life status of the beneficiary) are met.
So, since the corpus of the estate plan is not a present interest or asset actually held by a divorcing party, most would assume that it is not an asset subject to division and out of the Divorce is “out”.
Not exactly.
Few Things You Should Know About Massachusetts Divorce Act
While expectation is not an issue right now, it is not entirely out of consideration in the context of a divorce. On the contrary, there can be a great deal on the court’s radar.
Why?
Massachusetts General Laws, Chapter 208, Section 34 provides several factual considerations for the court to consider in the event of a divorce. Among these factors, GL c is. 208, § 34 requires the court to examine “everyone’s opportunity [party] for the future acquisition of capital assets and income. . . . “This includes an expectation, and while an expectation is not a present matrimonial asset held by a party subject to divorce in divorce, the expectation is an important consideration that the court must consider in determining the outcome of the financial Aspects of divorce must consider divorce.
But how will a party determine what the estate of its father and / or mother-in-law is worth? And what about the privacy interests of parents who are divorced looking for answers and information about their assets?
Discovery is the process by which a party to a divorce or litigation in general gathers information that may lead to the identification and presentation of evidence in the process or that is critical to the negotiation process and eventual settlement of a case without trial.
Discovery methods include the filing of individuals or organizations not involved in the divorce. The person who is dropped is the depositorthat is, the witness who is sworn in by a notary and who answers questions in front of a stenographer who makes an official copy of the certificate.
For a parent whose child is divorcing their spouse, the process of discovering that parent’s estate and property may be viewed as intrusive.
However, that exact question was considered by the Massachusetts Supreme Court in 1991 in relation to Vaughn v. Vaughn. The SJC examined the questions of a parent’s privacy interests and investigative interests in litigation in the EU Vaughn Case. The case, however, is an unpublished, uniform legal conception. It is not legally binding for the lower courts. And because it’s a 30 year old unpublished opinion, it can be a little difficult for people to find. You can read it on my website.
The process of providing information through an affidavit instead of an in Vaughn has become standard practice in Massachusetts to balance the competing interests of the parent’s privacy with the investigative interests of the litigator. The resulting document is referred to as Vaughn affidavit.
A Vaughn affidavit limits the information required to be disclosed by a parent who is not involved in a divorce to (1) their approximate current total net worth (plus or minus $ 500,000), (2) a general description of their current parent Estate plan and will and (3) the date on which the estate plan or will was last modified, if applicable.
As you can see, the question of the relevance and treatment of gifted and inherited assets in a divorce is not a simple matter of whether the body of the estate or estate plan of a parent of a divorce party is “in” or “out” of the divorce.
I hope this article helps the reader understand these issues better.
Comments are closed.