Basic Principles of Dividing Property in Divorce Mediation
By Anthony C. Adamopoulos, Divorce Mediator
As a mediator, I work hard to get parties to a property division quickly and for less cost. To do this, a properly prepared Financial Statement is essential. Unfortunately, some spouses are their own worst enemy when it comes to completing their Financial Statement; this causes delay and cost.
This article will explain how property is divided and how a properly prepared Financial Statement will efficiently lead to a mediated property division.
In Massachusetts, the general rule for dividing assets is that only material assets are divided. And, they are divided fairly. No Massachusetts law requires a 50/50 split.(See: https://www.divorcingoptions.com/Blog/if-we-go-to-court-will-our-property-be-divided-down-the-middle/ )
Generally, the mediator starts with asking if there is any reason why a fifty/fifty division would not be fair. If any reasons are offered they are considered and the mediator makes suggestions.
If mediating parties do not cooperate and compromise on a property division, then a judge or arbitrator will decide what is fair and a division is ordered as part of litigation.
Usually, substantial property includes: real estate, bank accounts with more money than necessary to pay a month’s worth of routine expenses, retirement accounts, investment accounts and valuable unique items, e.g., art work, a yacht or a private business.
It is not unusual to divide value rather than an actual item. For example, if property includes a house with an equity of $300,000.00 and a personal business in the husband’s name with an equity value of $300,000.00, the property agreement may be that the wife keeps the house and the husband keeps the business.
Generally, immaterial assets stay with whomever owned or primarily used the asset, examples include: an automobile, a wedding ring, engagement rings, a dump trailer used to take trash to the curbside, a lawnmower, tools.
Reasons for not equally dividing an asset, material or not, include, but are certainly not limited to: the marriage lasted less than five years; a spouse’s conduct resulted in unreasonable spending; a spouse’s health requires special needs; a spouse’s lack of any type of contribution toward the acquisition of a piece of property.
Before a division can be made, all material property needs to be properly described and listed in each spouse’s Financial Statement.
A properly prepared Financial Statement allows the judge, arbitrator, or mediator to:
- See how each piece of property is “legally held or owned”.
- See the value of each separate piece of property.
- Obtain the complete name of each property and any account number.
Items 1 and 2 are used to determine, with other information, what a fair division would be.
Item 3 is necessary to comply with the requirement that a Separation Agreement be “clear and unequivocal”. That is why the mediator includes the exact name and account number of material property in the property section of the Separation Agreement.
The first paragraph of this article stated: “… some spouses are their own worst enemy when it comes to properly completing their Financial Statement: …”. Clients who choose to ignore instructions for completing Financial Statements will always cause delay and more cost.
Marital debt must also be divided and can affect a property division; this is a subject for another day.
The 2 takeaways:
– In Massachusetts, property must be divided fairly, not equally.
– The failure to properly prepare the Court’s Financial Statement will delay the property division and will add to the cost of divorce mediation.
©2020 Anthony C. Adamopoulos