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Monday, March 22, 2010

Can Assets I Owned Prior to the Marriage be Divided in a Divorce?

The short answer is YES! Whether or not they are divided will depend on a number of factors.

For divorce purposes, Massachusetts gives very broad definition to "marital assets". Absent a pre-nuptial agreement every asset and liability owed by either party is considered by the Court in a division. The Court can consider the source of the asset but that is just one of the factors in whether or not to divide it. Under M.G.L. ch. 208 § 34, the Court can assign alimony or division of property based on the following section:

"In determining the amount of alimony, if any, to be paid, or in fixing the nature and value of the property, if any, to be so assigned, the court, after hearing the witnesses, if any, of each party, shall consider the length of the marriage, the conduct of the parties during the marriage, the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities and needs of each of the parties and the opportunity of each for future acquisition of capital assets and income. In fixing the nature and value of the property to be so assigned, the court shall also consider the present and future needs of the dependent children of the marriage. The court may also consider the contribution of each of the parties in the acquisition, preservation or appreciation in value of their respective estates and the contribution of each of the parties as a homemaker to the family unit." (emphasis added)


Generally, any asset earned during the marriage will be divided 50/50. A stay at home parent's contribution as homemaker and in child-rearing is considered equal in value to the earning capacity of a working parent. A good example of this is the equal division of retirement accounts earned during the marriage.

Regarding assets earned prior to the marriage, those are more difficult to predict. The other factors, such as the length of the marriage, health of the parties, etc. can have a significant impact on whether or not these assets are divided. Generally we tell clients that in short term marriages (less than 5 years) the Court tries to put people back in the position they were in prior to the marriage (returning previously owned assets).

As marriages get longer, though, it is very typical for assets to "merge" into the fabric of the marriage. A major factor in this consideration is whether or not the asset was shared during the marriage. For instance the marital home (if purchased by one party prior to the marriage) is pretty likely to "merge" as more time goes by because both parties contribute to its "preservation and appreciation"(even if the title is not changed).

If you are concerned about keeping pre-marital assets separate you should consult with an attorney regarding the preparation of a pre-nuptial agreement prior to the marriage. If you are already married and considering a divorce, you should consult with an attorney to explain your specific circumstances before assuming property will be kept separate or merged by the Court.

5 comments:

  1. Hypothetical: Wife has bankruptcy at beginning of a marriage. Husband and Wife purchase a home in a community property state, but Wife conveys property to Husband as she has no credit and minimal income. They purchase another home together, in another community property state, and the second home is also conveyed by the Wife to the Husband at his request, due to her lack of income as “Housewife” and “Stay-at-Home-Mother”. Both properties were purchased and paid for with community assets from Joint or commingled accounts. Wife financially contributed towards the purchase of all properties, including down payments and mortgage payments.
    After 15 years of marriage they decide to separate. The first property is for sale, and is about to close. The husband and wife have an agreement to split the proceeds in order for her to move out. Wife’s annual income at this time is $17K and Husband’s annual income is $40K. Wife finds a home with an owner-will-carry with down payment. Wife borrows $10K from personal friends, with agreement to reimburse from her share of $24K proceeds from sale of community property. The distribution of the proceeds has been agreed upon by both husband and wife. Husband files divorce unbeknownst to Wife. The Husband enlists a family member to file a lien against the property for an amount that encompasses the remainder of proceeds after realtor fees, titling, etc. The property is sold, without wife’s signature at titling. Wife is not informed about final sale or lien on first property.
    The couple reconciles, and purchases a third property together, with both names on title. A Year later, the second property is then gifted by husband to the family member of previous mention. The family member then conveys property to a trust account. Wife again is not informed of transfer, nor has she signed the conveyance.
    Wife supported Husband during his times of unemployment and physical rehabilitation, as well as during his educational processes. Wife was unable fulfill her educational needs for a suitable career or earnings. Wife stayed at home to raise the couple’s children, before returning to the workforce when the children were both in school.
    The following year, the third house is foreclosed, the couple move back to the Second home. Six months later, Wife moves out, and the couple files for Divorce. During trial, the husband alleges that wife is self sufficient, and informs the court of her previous home purchase (which was conveyed back to original owner). Wife failed to tell the Court about the purchase terms of that home, including where the down payment came from, but stated the conveyance to original owner and the terms of the couple’s reconciliation.
    The Judge will be reviewing the Community assets and debts, including determination of alimony, and will be giving his decision or recommendations. Does the Wife have an opportunity to inform the Court of the oversight, either in an addendum or a statement of error?

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  2. In response to the "Anonymous" 1st comment, you should really consult with an attorney in your local jurisdiction regarding these issues. In Massachusetts if you fail to present evidence at a trial that you were aware of at the time of trial, it is very unlikely that you will be able to present that evidence to the Court after the trial. I might try filing a Motion to Admit Further Evidence if the trial was very recent, but even that would likely be a long shot. Since you don't indicate the jurisdiction in your post, I can't speak to your local jurisdiction's rules of Civil Procedure, which is why I recommend you consult with local counsel.

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  3. RE: prior hypothetical comment, The community property was sold, without wife’s signature at titling. Wife is not informed about final sale or lien on first property. The husband and wife had an agreement to split the proceeds in order for her to move out.Wife found a home with an owner-will-carry with down payment. Wife borrows $10K from personal friends, with agreement to reimburse from her share of proceeds from sale of community property. These facts were not brought into evidence during prior pleadings, and were only mentioned during trial under the Husband's allegations that Wife was and is self sufficient, and therefore does not require any form of support or maintenance. Should wife have objected to this line of questioning?

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  4. In response to the "Anonymous" 3rd comment: Although you have provided a lot of information, it is not nearly enough to respond to your question. In addition, although I have allowed your comments to be published, it is only to point out that this is not the appropriate forum for these types of specific questions. The amount of preparation that goes into a divorce trial and the many issues that are addressed make it impractical (if not almost impossible) to second-guess trial strategy after the fact. Whether or not objections should be made to certain testimony is dependent on numerous issues many of which require in-the-moment choices at trial. Again, I suggest that you consult with counsel in your local jurisdiction to help you answer these very specific questions.

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  5. RE: Previous postings. The hypothetical is a class project. The Couple are fictional Characters. Another version was a short-term marriage with no assets, and the above, two versions have been done, one was parties were in proper persona, the next version was with representation. I appreciate your Candor. The original posting (of prior assets)was similar to one of the items presented in the project, the rest is other details. The next project was a 40 year marriage with division of a Community Trust. The comments were not intended to receive more than another perspective.

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