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The Difference between Disclosure and Division in Divorce

We encourage our clients to use non-adversarial joint problem solving to resolve conflict.  A simpler way of saying that is that we work with people to talk about and solve their problems together.  We ask our clients to stop seeing the other person as an obstacle to overcome, and rather to see them as an ally in finding a solution that can work for everyone. Consider the advantages of this approach when it comes to a financial negotiation:

Just like poker players hide their cards when they play a hand, people often assume the best approach to negotiation is to hold back information to achieve the best outcome for themselves.  This analogy ignores the fact that the rules of poker are designed around having incomplete information, and using clues to gain an edge.  The rules of negotiation are often different depending on the context.  For example, in a divorce case the court in Massachusetts requires certain financial information to be automatically disclosed, and other information that is likely to lead to relevant information can be obtained through formal discovery.

In a Massachusetts divorce case, whether the parties settle (and file a Joint Petition) or go through litigation (on a Complaint for Divorce), a Judge is still required to approve any settlement agreement at a hearing, and the parties are both required to file a court form Financial Statement.  The Financial Statement is an under oath statement intended to be a true, accurate, and complete summary of each person's income, expenses, assets, and liabilities.  Through this format, in Massachusetts a basic disclosure of all financial information is required in every divorce case.

These rules ensure an even playing field in negotiation and settlement.  However, it's important to understand that disclosing an asset doesn't necessarily mean it must be divided.  Massachusetts asset division is governed by M.G.L. chapter 208 section 34, which defines a number of factors for the court to determine an equitable division, and equitable does not necessarily mean equal.

That is why we think it is important to distinguish between Disclosure and Division.

Just because something is disclosed and both people have the same information, doesn't mean that they will agree on how to divide something, nor should it imply that they have to.  This is where additional information can help enlighten a negotiation, helping each side understand the others' position or goals.

The other person in a conflict is the only other person in the world who has as much information as you about the issue causing disagreement.  All the professionals you work with will never know as much as you do about your own life.  So the best problem solving method should put the two of you at the center, and provide you with an effective path for working together.

In addition to this basic financial disclosure required by the court, in a divorce mediation or collaborative divorce, the guiding principle is that people making decisions should have the same information.  Outside of court, mediation and collaborative law set their own rules about what should be disclosed or requested.  People in conflict are sometimes unsure about what to share and what to hold back, and they might not be clear on the "rules" especially if they're afraid that disclosing something means it will automatically be divided.

That is why it's crucial to explain the difference between disclosure and division.  We guide our clients through joint problem solving by encouraging them to think of the process as follows:



People may disagree about the impact of information, but if they have the same information there is an opportunity to address the areas of disagreement.  If an asset or income stream is hidden, then people can't agree on it's impact, and if later discovered, the act of hiding something can destroy all possibility of joint problem solving.

The court process is designed to set up specific rules for default information to share, and puts the burden on the person requesting the information to be both specific and to enforce their requests.  This is a necessity in an adversarial system where the assumption is that everyone is trying to hide something.  In mediation and collaborative law, we start with a different assumption: that people who are willing to commit to joint problem solving will also share all relevant information in an effort to work together.  We start with the assumption that people can make their joint problem into a joint solution, and that working together will be more enlightening as to the best possible solutions for all.


Comments


  1. My husband and I are divorce online here https://floridaonlinedivorce.com.

    My question is what portion of my retirement account, if any, is my husband entitled to? Same question for me for his.

    Additionally, am I correct in assuming that we are only entitled to the gains/losses accrued during our marriage (12 years) and that anything earned before our marriage is considered separate property?

    I’m a former government employee (now retired) and have a Thrift Savings Plan (TSP). He is employed by a corporation and has a traditional 401k.

    We are in Florida.

    ReplyDelete
    Replies
    1. We cannot provide legal advice in Florida. Whether a retirement account is considered a marital asset (and on what proportion) is a matter of local law and you should consult with local counsel. Pensions and Retirement accounts, including government pensions and TSPs, can be divided as part of a divorce by use of a Qualified Domestic Relations Order. Whether or not it should be in your case is something you should get local advice on.

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