Impact of property and debt division on credit

David M. Gabriel & Associates

As a part of the property settlement in a Massachusetts divorce, the debts the couple have will also be divided in the divorce decree. When a debt is allocated to a spouse who fails to pay or pays late, the credit of the other spouse, if the debt was one that was held jointly, may be negatively impacted despite the order. Creditors are not parties to divorce actions, and as such, they can still hold anyone listed on an account liable for its balance. This can cause a problem in the event the spouse that is supposed to repay the debt according to the property settlement fails to do so. His or her late payments or non-payment can be reported on the other spouse’s credit report, and the company may initiate collection actions against either or both spouses. One option a spouse has in the event his or her ex fails to pay a debt that was required to be paid under the property division order is to file a motion for contempt with the family law court having jurisdiction over the divorce action. The court may then take steps to enforce its orders. When people are getting divorced, it may be a good idea to try to get their names off of any jointly held accounts, including debts for which they will not be responsible under the property settlement order. The marital property will include the debts incurred during the marriage, and those debts should be expected to be

The tax filing implications of divorce

David M. Gabriel & Associates

Divorcing couples in Massachusetts must take the time to work through their assets and determine how the property will be divided. In addition to deciding what will be done with the family home, couples must also take time to review how income taxes will be handled. This is particularly important if there are minor children who can be claimed as deductions. The first thing to remember is that filing status is guided by very clear rules. Before the divorce is finalized through the courts, couples can either file as married or married filing separately. Filing status is determined by the marital status as of December 31. An alternative to filing as married is to claim head of household status if the qualifications are met, and this can help bump some divorcees into a more favorable bracket. Dependents are claimed by the person that they lived with throughout most of the year. This is usually the custodial parent. In the case of shared custody, the parents should agree ahead of time on which partner will claim the children. There are many divorces where the non-custodial parent covers the medical cost for their children. Those costs can be deducted even if the custodial parent is claiming the exemption for the child. Alimony payments may be deducted even if the individual does not normally itemize deductions, but the payments must be made in cash and classified as alimony in the divorce agreement for the IRS to allow the deduction. Working through the tax

Courts consider several factors in marital property division

David M. Gabriel & Associates

Massachusetts law provides some specific guidelines for the court’s consideration regarding property division in a divorce proceeding. Since Massachusetts is an equitable distribution state, the court is charged with facilitating a settlement that is deemed fair to both parties. This approach differs from a community property division in that “fair” may not necessarily mean “equal.” When a mutually satisfactory division of assets cannot be reached in a divorce proceeding, the court first must determine what assets and debts are to be considered marital property. It must then proceed with an appropriate valuation of that property. Once the property is valued, the court then issues a ruling setting forth a division of property deemed to be equitable. Several factors must be considered by the court in its decision. These factors are defined by Massachusetts statutes, including the length of the marriage, the conduct of the parties during the marriage, the age, health, station and occupation of the parties, the amounts and sources of income, vocational skills and future earning capacities, employability, estate, the liabilities and needs of each party and the amount and duration of any alimony awarded. Additionally, the present and future needs of dependent children must be considered. The court may also consider each party’s contributions with regard to the respective estates, the contributions of each party as homemaker and other specific considerations such as health coverage. The stress of a divorce proceeding can be considerable. Seeking the advice of a family law attorney may help to facilitate the

Division of marital property in Massachusetts

David M. Gabriel & Associates

During a divorce proceeding, distribution of marital property can be a complex process. Massachusetts has established statutes regarding property division of various types of assets. Fair distribution of assets, including alimony, health insurance and business values, is ultimately determined by the court. The division of marital property has tax consequences that must also be considered by both parties. In addition to one party paying alimony to the other, the commonwealth’s courts may also order that one spouse pay for vested and non-vested retirement accounts, investments made together and funds earned during the marriage. Other assets that the court may assign to be distributed include retirement accounts, military and veteran’s pay and pensions, private pensions, profit-sharing ventures, annuities, deferred compensation and insurance settlements. Determination of equitable distribution also includes physical property or the property’s value. When performing a complex property division, the court takes into consideration the needs of dependent children. Additionally, it factors the ability of each party to earn a living, the contribution that each spouse made to the household income and the contribution that each made in running the household. The values of shared assets must be verified when marital assets are distributed during a divorce. The values of personal property, any jointly held business, land, homes and other valuables may be a contentious issue between the two parties. An attorney can help with a thorough investigation and analysis to ensure that their client receives an equitable distribution of marital property at the moment of the divorce and

Dividing property after a divorce

David M. Gabriel & Associates

If a divorcing couple has not settled their division of assets through a signed Marital Settlement Agreement in Massachusetts, the issue is left to the courts. Massachusetts is an ‘equitable distribution” state, meaning that if the parties cannot agree on how to divide their assets and debt, the Family Court within the Judgment of Divorce will award property based on what is deemed to be fair. It is important to know that ‘equitable” and ‘fair” are not synonymous with a 50-50 split of marital debt and assets. When determining how much each party gets, a number of factors will be taken into consideration. These factors include the income of each party and their current occupations, vocational skills and potential to be hired. Each party’s health and age are also taken into consideration. The length of the marriage and the behavior of each spouse throughout are also used when determining property division. To determine the assets and debt that must be divided, the Family Court will first determine which assets and debt are actually marital and assign dollar amounts. Once the monetary value is determined, property and debt will be assigned equitably. A divorcing spouse who has not been able to reach a settlement on property division without the court can benefit from a divorce attorney who can be a strong advocate. It is important that the judge has a clear idea of the spouse’s situation and that the spouse receives a favorable ruling. Source: Divorce Support, “Massachusetts Property Division Factors“,

Massachusetts property division could involve pet ownership

David M. Gabriel & Associates

Massachusetts pet owners know that animals can, at times, feel like their children. Individuals may care for their pets much like they would care for children, from sending them to day care to buying them clothing. Unfortunately, in the eyes of most court systems, pets are considered property and, in the event of a divorce, pets may come under the jurisdiction of the property division processes. Pet ownership can become a point of contention for individuals who are going through divorce. Depending on when the pet was acquired, the court could have to decide which party maintains ownership of the pet. If the pet was given as a gift or was owned before the couple got married, the animal may be considered separate property, and this type of property cannot be divided by the court. In such a case, the original owner of the pet would maintain that ownership. However, if a pet was brought into the family together after the couple married, the situation may become more complicated. If the pet is considered community property, the court may decide which party may keep the pet. Though this may seem disheartening for the party that does not maintain ownership, the individuals may be able to create a visitation schedule similar to a child custody schedule that could allow both parties to see the pet. Property division is often a complicated endeavor when it comes to divorce, and when something so important to a party, such as a pet, is involved,

Equitable distribution and property division in divorce

David M. Gabriel & Associates

One of the hardest aspects of divorce is the division of property between two spouses and understanding equitable distribution. Finances are often one of the major points of contention in a marriage, and this can carry over into the divorce process. It is beneficial for Massachusetts couples to understand equitable distribution and how this will affect their divorce process. During a divorce, a couple has the option to work together on an agreement that will dictate the division of assets and other aspects of dividing finances. This can be achieved through mediation and the assistance of each spouse’s legal teams. However, this amicable process is not always possible with every couple, and it may be up to the discretion of the court how property and assets will be divided. Equitable distribution is the division of property according to what the court deems reasonable or fair. This is based on spouse earnings, marital property, length of the marriage and more. It is important to remember that equitable division in no way guarantees that this process will be completely equal or reflect the wishes of the couple. For this reason, many couples choose to work on an agreement to divide their property. Determining how property should be divided is not an easy task. Because of the potential complexity of this process, it is beneficial to understand all options and how to pursue the optimal outcome from the divorce. Equitable distribution is one aspect of a divorce that may be confusing for Massachusetts

Discussing property division before remarriage may be beneficial

David M. Gabriel & Associates

For some Massachusetts residents, their first marriage may have ended up being more of a learning experience rather than the happily ever after that they had hoped for. It is not unusual for individuals to go through more than one marriage in their lifetime, and as they move into their next marriage, they may take lessons regarding divorce with them. Creating certain documents and discussing finances before marriage could help with property division should another divorce come about. Finances are something that parties should be open about if they are considering remarriage. If a person has been married before, it is not unlikely that he or she faced significant financial issues during the separation. Therefore, expressing any concerns regarding the financial situation could help cut off future arguments as well as possibly explain the desire for a prenuptial agreement. A prenuptial agreement can help create terms about certain financial aspects, such as alimony, and also help protect certain property and funds in the event of a divorce. If an individual has children from a previous marriage, a prenuptial agreement can help ensure that any inheritances would not be significantly impacted in the event of another divorce. These agreements can be beneficial for all parties involved, especially should property division proceedings come about. Property division can be a point of contention, and if a marriage does not end on good terms, some individuals may wish to gain as much property as they can. However, a prenuptial agreement and financial discussions could

Property Division

Impact of property and debt division on credit

The tax filing implications of divorce

Courts consider several factors in marital property division

Division of marital property in Massachusetts

Dividing property after a divorce

Massachusetts property division could involve pet ownership

Equitable distribution and property division in divorce

Discussing property division before remarriage may be beneficial

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Property Division

Categories

TAGS

TAGS

David M. Gabriel & Associates

Is Ready to Help You

Main Office

Salem Office

Burlington Office

Life Complicated? We Can Help

Life Complicated?We Can Help

Life Complicated?
We Can Help