Marital property is often at the center of contention in a divorce case. Among the many types of property that may be considered part of the marital estate are retirement accounts and pension plans, business assets, and inheritance assets—and these assets are often litigated in a seriously contentious manner.
A recent Massachusetts appellate case, Dilanian v. Dilanian, addressed the issues of business assets, inheritances, and pension plans as part of the marital estate. In that case, the parties were married for thirty-one years, living a comfortably upper-middle-class lifestyle. The wife stayed home, while the husband ran a successful business, which he originally started with his father, but of which he was the sole owner by the time of the divorce proceedings. The parties filed for divorce, and while they amicably resolved issues regarding some of the marital property, including the marital home, much of the trial centered around the value of the husband’s business and the husband’s share in various assets, including pension plans.
The trial judge reviewed the husband’s income from his business, noting that in order to avoid double taxation, the husband paid himself a salary and a year-end bonus each year, leaving little funds in the company’s account as retained earnings. The husband’s financial statement reported significant income increases between 2008 and 2010, but his income was drastically reduced in 2011 and 2012, after the divorce proceedings started—yet at the same time, the amount of cash left in the business accounts increased by over $294,000, contrary to the husband’s prior practice.
The judge found that the husband had artificially lowered his income, and that the husband’s real annual income was approximately $325,000, ordering alimony to be paid to the wife in the amount of $2,000 per week. In valuing the marital estate, the judge did accept the husband’s valuation of the business, only adding in the amount of a promissory note payable to the husband for a personal loan made to the company. The husband was allowed to keep the business.
At issue were also two pension plans that the husband had contributed to during the marriage, along with an inheritance from his father, which occurred very late in the course of the marriage. The judge found that the inheritance was received so late as not to be “woven into the fabric of the marriage” and belonged to the husband. However, the judge also ordered the husband to transfer 60% of both pension plans to the wife.
The husband appealed, claiming that the trial judge abused discretion in both the judge’s valuation of the business and in giving the wife 60% of the pension plan benefits. He argued that the company’s defined contribution plan belonged partially to his now-deceased father, and thus to his sister, who received part of the father’s estate after the father died.
The Appeals Court disagreed. The Court explained: “contrary to the husband’s argument, the judge’s order will not adversely affect the interests of third persons. The plan documents establish that the beneficiaries of any portion of the defined contribution plan that belonged to the husband’s father are the husband and his sister, in equal shares. The sister, as coexecutor of the estate, signed an estate tax return taking the position that $663,961 of the plan belonged to the father. Accordingly, half of that amount ($331,981) could be claimed by the sister. Once sixty per cent of the plan is transferred to the wife, the remaining amount will be well in excess of the amount the sister claimed in the estate tax return and appears able to claim.”
The Appeals Court also found no issue with the trial judge’s valuation of the business as part of the marital estate, holding that there was nothing unreasonable in considering the $150,000 note payable to the husband part of the value of the company. The Court also disagreed with the husband on his assertions that the income imputed by the judge to the husband at trial was incorrect. “[C]ontrary to the husband’s assertion, the evidence supported the finding that the husband’s reported income was increasing until he filed for divorce in 2011, and that the husband intentionally reduced his own salary while amassing corporate earnings usually directed toward his personal income,” the Court held. “Given this evidence and the husband’s furtive financial disclosures, including his failure to prepare a 2012 financial statement for [the company], the trial judge could reasonably conclude the husband artificially reduced his income to alter his financial condition in light of the impending divorce.”
It is important to hire a competent family law lawyer to handle your unique case or answer your personal questions. If you have any questions about property distribution, alimony, divorce, or family law issues, please call our offices at 978-225-9030 during business hours or complete a contact form on our website. We will respond to your phone call or submission with prompt attention.
Robert and Mary, a Massachusetts couple, have been married for ten years and now want to proceed with obtaining a divorce. During the marriage, Robert worked and Mary took care of the home. They had no children. Because Robert has a pension plan, the question comes up: how does a court handle Social Security benefits and pension/retirement plans in property division and alimony?
In Massachusetts, the property in a divorce is subject to an “equitable division.” This does not mean that each party to the marriage receives an equal share of property in the marriage. Rather, each party to a marriage receives fair and equitable amounts of property, so that each party can experience a similar lifestyle to which he or she grew accustomed during the marriage.
A pension earned during the marriage is generally considered to be a joint asset of both parties, and would likely be equitably divided via a qualified domestic relations order. This is an order that is filed with the Massachusetts Family Court and if approved is given to the administrator of the pension, so that the pension maybe divided between the parties. The division of a pension may be a complex issue because pensions, also including IRA or 401(k) accounts, are not always equal in a dollar for dollar manner, as there may be penalties and taxes associated with them. A family law attorney can help evaluate and value the numerical amounts to handle this complexity on your behalf.
Retirement accounts are also considered to be marital assets in a divorce. As such, retirement accounts would be divided on an equitable basis. This issue becomes complex, however, because the parties must look to the length of the marriage. For example, in the case above, Robert and Mary were married for ten years. Suppose, therefore, that Robert continues to work for another 30 years. His payment to Mary would be one half of the quarter of the account, because his payment is one half of his working life during the marriage.
Alimony is different from property division in a divorce. Alimony is court-ordered support from one spouse to another and is separate from the equitable division of property. In Massachusetts, there are four types of alimony: (1) General Term alimony (provides regular support for a length of time based on the length of the marriage); (2) Rehabilitative alimony (provides regular support until the ex-spouse is able to be self-sustaining); (3) Reimbursement alimony (provides regular or one-time support for a shorter marriage to make up for costs that the ex-spouse paid in supporting the other spouse); and (4) Transitional alimony (provides regular or one-time support).
If a judge decides to award alimony under the common General Term alimony standard, then he or she will review the following factors when deciding whether or not to award alimony or for how much the alimony award should be assigned: the length of the marriage; age of the parties; health of the parties; income, employment and employability of both parties, including employability through reasonable diligence and additional training, if necessary; economic and non-economic contribution of both parties to the marriage; marital lifestyle; ability of each party to maintain the marital lifestyle; lost economic opportunity as a result of the marriage, and other factors the court considers relevant and material.
Robert and Mary were married for ten years, and the facts indicate that Robert was the sole working person in their family unit. As such, alimony payments would likely be awarded to Mary from Robert. Depending on the type of alimony that the Court determines that Mary would receive, Mary would likely be able to receive alimony payments until Robert’s retirement age. The Massachusetts family court may review several factors in awarding alimony payments to Mary, such as her health and disability (if she has issues such as these), marital lifestyle (she was able to stay at home), and her contribution to the family unit (lost opportunity to work, for example).
If a Massachusetts Justice decides to use this equitable factors approach under General Term Alimony, then the Justice would likely order that Mary receive alimony for seven years, unless Mary remarries or if Robert passes away or if Robert reaches full retirement age. If Mary cohabitates with someone else and has maintained a common household with another person, then Mary’s alimony payments could be ordered to be ceased. It is important that a payor spouse, like Robert, not arbitrarily discontinue payments without the approval from a Massachusetts Justice.
If you are seeking a competent family, pension, retirement, or alimony law lawyer or domestic relations attorney, please contact our offices by phone at 978-225-9030 during business hours or complete a contact form on our website. We will respond to your phone call or submission promptly, and you may schedule a free consultation with us.
How is a share in a partnership valued in a divorce? How are professional practices valued in a divorce?
People facing a divorce are often concerned about their financial futures. One such financial concern regards how shares in a partnership are valued in a divorce. Parties may also wonder how professional practices are valued in a divorce.
Say, for example, that Taylor and Alex have shares in a financial management business. Also, Taylor owns a medical practice. Now that they are divorcing, Taylor and Alex want to know how their assets will be divided, and specifically, how the shares in the financial management business and the medical practice will be divided.
In Massachusetts, assets are divided on an equitable basis. A judge’s decision as to what is equitable will not be reversed unless “plainly wrong and excessive.” A court may assign all or any part of the estate of the other, including, but not limited to, retirement benefits, military retirement benefits, pension, profit-sharing, annuity, deferred compensation, and insurance. The definition of estate is broadly defined, however. In fact, Massachusetts courts allow the division of premarital property and post-marital property on a case-by-case basis. With regard to the division of shares in a partnership, courts will generally interpret G.L. c. 208 § 34 to include partnership assets within the scope of the possible assets that may be divided in a divorce.
Shares of a partnership and business practice interests are part of the marital estate and may be valued by a valuation expert to assess the market value of the asset. A professional practice, like a medical practice, is considered in Massachusetts to be subject to division during the divorce process. Massachusetts courts may order one of the parties in a divorce to relinquish their share of ownership in the business and receive payment either as a lump sum or in a series of installment payments. A court may order that the business be sold and the spouse receives the profits. One spouse could buy-out the business from the other spouse or offset the business with other assets.
During the valuation process, there are generally three valuation methods: the market approach (estimates business value by comparing the business to a similar business that is recently sold); the income approach (estimates business value by converting economic benefits into a value); and the asset approach (estimates business value based on the assets and liabilities of the business).
In the above example, Taylor and Alex have several possible options afforded to them. A Massachusetts Probate and Family Court will divide the estate equitability based upon the parties’ needs and what is most equitable based on their individual case.
Want to speak with a divorce lawyer about your case? Schedule a free consultation with our office and you’ll learn how the law applies to your facts and circumstances. Call 978-225-9030 during regular business hours or complete our contact form online, and we will get back to you at our earliest opportunity.
 Adams v. Adams, 459 Mass. 361, 371 (2011) (citing to Bowring v. Reid, 399 Mass. 265, 267 (1987))
 Adams, 459 Mass. at 371 (citing to Redding v. Redding, 398 Mass. 102, 108 (1986))
 M.G.L. c. 208 § 34
 Rice v. Rice, 372 Mass. 398, 400 (1977) (holding that an estate is all property to which the party holds title, however acquired.)
 Moriarty v. Stone, 41 Mass. App. Ct. 151, 156 (1996) ; Brower v. Brower, 61 Mass. App. Ct. 216, 218 (2004)
 Goldman v. Goldman, 28 Mass. App. Ct. 603, 613 (1990).
During the divorce process, most parties want to ensure that the end of the marriage won’t result in the end of their preferred lifestyle. How are automobiles treated during property division? How are other personal items of value, such as jewelry and antiques valued in a divorce?
Say, for example, that Alex and Jamie were married for twenty years and have filed for divorce. They appreciate their belongings and want to know how their material items will be divided. Alex is a collector of antiques and also owns two expensive automobiles. Jamie drives the family van and also owns jewelry. Because they cannot agree on the division of their property, they want to know how the antiques, vehicles, and jewelry will be divided by a Massachusetts family court during the divorce process.
If the parties in a divorce agree to their own division of property, the courts in Massachusetts will usually support the fair and reasonable distribution of their agreement related to the property division. However, if the parties cannot agree, Massachusetts courts will make the determination as to how assets should be divided. This division is known as an “equitable division.” Equitable does not necessarily mean that each party is entitled to “equal” or 50/50 division of assets. Instead, the courts will use several factors to determine the fair division of assets. Although the list is not exhaustive, courts determine what is fair by examining the following factors:
- length of the marriage;
- conduct of the parties during the marriage;
- age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities and needs of the parties;
- opportunity of each for future acquisition of capital assets and income;
- amount and duration of alimony;
- present and future needs of dependent children of the marriage; and
- 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.
If one former spouse believes that she is entitled to more property than a judge initially awarded, another judge may order that without a clear and adequate explanation for the amount of property awarded between the parties, the division of property may not be equitable.
If they cannot agree, Alex and Jamie would experience the Massachusetts court-imposed “equitable division” standard. Their twenty years married, their conduct during the marriage, and the personal items and property shared between them, including the antiques, cars, and jewelry, would be evaluated and divided.
The value of the personal items is dependent on the circumstances which warrant division of property in recognition of the marital partnership concept [. . .] Therefore, Alex’s and Jamie’s tangible property could be valued at a fair market value rate, which means that the amount that the property would sell within an open market. If the amount of an item cannot be determined, a judge could look to professional appraisals, receipts, and other material documentation to reach the property monetary amount.
If you have any questions about the divorce process or assignment of property, you may schedule a free consultation with our office. Call 978-225-9030 during regular business hours or complete our contact form online, and we will get back to you at our earliest opportunity.
 Mass. Gen. Laws ch. 208 § 34
 Bowring v. Reid, 399 Mass. 265, 268 (1987) (remanding a decision so that a judge may articulate the rationale for the Section 34 alimony and property awards, especially because the plaintiff alleges that the defendant was unfaithful and abusive and the plaintiff’s contribution to the marriage, her needs, and her sources of income were not considered.); See, Redding v. Redding, 398 Mass. 102 (1986).
 Davidson v. Davidson, 19 Mass.App.Ct. 364, 370 (1985) (citing to Inker, Walsh & Perocchi, Alimony and Assignment of Property: The New Statutory Scheme in Massachusetts, 10 Suffolk U.L.Rev. 1, 8 (1975))
A property attachment is a possibility during divorce: either spouse, under Massachusetts divorce laws, may attach the other spouse’s real and personal property to ensure suitable support for the attaching spouse and children in his/her care and custody.
Consider the example of Betty and Bob, who made their marital residence a ranch home Bob purchased in his name before their union. When the marriage dissolved, Bob tried to sell the home, despite a restraining order that prohibited him from putting the home up for sale. In such a scenario, a writ of attachment filed in the Registry of Deeds of the county in which the couple resides will notify any would-be buyer that title to the property is not clear because of pending litigation. This includes Betty’s spousal lien, which preserves her rights to distributable property in the separation agreement.
A writ of attachment, signed by the applicable Probate Court clerk under the Commonwealth court’s seal, must include the following information:
- the parties’ names and residences;
- the divorce complaint date;
- the name and address of the plaintiff’s attorney, if any; and
- the name of the justice granting the attachment and the approval date.
The writ directs the applicable county sheriff or deputy, or other individual duly authorized by law, to attach the defendant’s targeted real or personal property in the court-approved amount and return the process to the court.
The spouse seeking the property attachment must file the complaint for divorce, along with a motion for attachment backed by an affidavit containing facts based on the spouse’s own knowledge or belief. The defendant spouse must be given notice of the application for the attachment, which, after hearing, a justice may grant only after finding “a reasonable likelihood that the plaintiff will recover judgment, including interest and costs, in an amount equal to or greater than the amount of the attachment over and above any liability insurance shown by the defendant to be available to satisfy the judgment.” Attachment must be made within 30 days of the writ’s approval.
A property attachment may be made by a court-ordered injunction that would enable a party to attach in equity stock shares and other property unreachable in actions at law. Alternatively, attachment may be made by trustee process, under which service of a summons is made on a trustee notifying the trustee to attach designated goods, effects and credits of the defendant in the trustee’s hands.
Another form of encumbrance is a lis pendens, whereby a party makes a claim of right to title to real property or its use and occupation. If, after a hearing, a judge approves the motion, a memorandum is filed in the appropriate registry of deeds identifying the court where the case is pending, the date of the writ, and a description of the property and town where it is located.
Attachment of property in a divorce action may also be made by a counterclaim, cross-claim or third-party complaint. The rules allow one party to seek an attachment “ex parte.” A court must find reasonable likelihood of recovery by the plaintiff and circumstances such as not having jurisdiction over the defendant spouse or evidence that the defendant will destroy, conceal or try to unload the targeted property if notified in advance of the attachment action.
If you have any questions about issues of divorce or property assignment, you may schedule a free consultation with our office. Call 978-225-9030 during regular business hours or complete our contact form online, and we will get back to you at our earliest opportunity.
 M.G.L. c. 208 §12; Mass. Dom. Rel. Proc. Rule 4.1 (a).
 Mass. Dom. Rel. Proc. Rule 4.1 (b).
 Mass. Dom. Rel. Proc. Rule 4.1 (c).
 M.G.L. c. 208, §13; Mass. Dom. Rel. Proc. Rule 4.2.
May the calculations for alimony payments include a spouse’s unvested stock options, particularly if those options were not considered to be part of marital property for purposes of equitable distribution? This question was recently answered by the Massachusetts Supreme Judicial Court. In Ludwig v. Lamee-Ludwig, the Court said yes. 
At issue was a practice colloquially known as “double-dipping,” which brings up “the seeming injustice that occurs when property is awarded to one spouse in an equitable distribution of marital assets and is then also considered as a source of income for purposes of imposing support obligations.”  As an example, double-dipping would occur where a party’s unvested stock options were divided equitably during the divorce, and later, when vested, counted as the party’s income for purposes of calculating alimony payments.
In the case at hand, the parties were divorced in 2014. Under their separation agreement, the wife was awarded alimony based on a portion of the husband’s annual base salary, and also awarded additional alimony based on a sliding-scale calculation of the husband’s bonuses and other forms of compensation. The trial court applied “the time rule” to this case: this rule considers the number of unvested options, as well as the length of time the employee spouse has owned those options PRIOR to the dissolution of the marriage.
The Court noted that because the trial judge did not consider the unvested stock options as part of the marital property to be divided among the parties during the divorce, no double-dipping occurred. “Here, there is no such injustice because the contested shares were not part of the equitable distribution of assets; by operation of the time rule, they were assigned to and retained by the husband outright.”  The source of property assignment only included options which were attributable to the marital partnership, and did not include stock options which were given for post-marital efforts. Therefore, the Court noted, those unvested options could be considered income for alimony calculation purposes.
Interestingly, the Court also pointed out that the practice of double-dipping is not prohibited as a matter of law—it may be done, so long as the trial judge considers the equities of each situation.
If you have any questions about family law or domestic relations issues, call our offices to schedule a free consultation, and one of our experienced family law attorneys will get back to you.
 Ludwig v. Lamee-Ludwig, No. 15-P-1177 (October 17, 2016-February 7, 2017).
 Id., at 5, quoting Champion v. Champion, 54 Mass. App. Ct. 215, 219 (2002).
 Id., at 5.