USA – MASSACHUSETTS Law and Practice Contributed by: Patricia Annino, Rimon, P.C.
whose name is on the asset, meaning the division of assets may not necessarily be equal, but must be fair. Factors to be considered MGL c 208-34 sets forth the factors to consider when dividing assets in a divorce: length of marriage, conduct of the parties during marriage, age, health, station, occupation, amount and sources of income, vocational skills and employability, estate, liability and needs, opportunity for future acquisition of capital and income and the amount and duration of alimony, if any is awarded. The court also has the discretion to consider each party’s contribution in the acquisition, preservation or appreciation in value of their respec - tive estates and the contribution of each as a home - maker to the family unit. It is important to note that in Massachusetts, as an equitable division state, gifts and inheritances (even those in irrevocable trusts) may be considered when dividing assets. Status of a surviving spouse From an estate planning point of view, a surviving spouse may not be totally disinherited (MGL c 191, Section 15). Even if a spouse is omitted, that spouse has an elective share which is a right to waive against the will and take a statutory share. To do so, the surviving spouse must file a waiver in the probate court within six months of the filing of the will. Under the current law (MGLA c 191, Section 15), if the decedent left issue (children and grandchildren), the surviving spouse is entitled to USD25,000 and a life interest in a third of the remaining estate. If the surviving spouse did not have issue, but has other relatives, the surviving spouse receives USD25,000 and a life interest in one half of the remaining estate. If the decedent does not have children or relatives, the surviving spouse is entitled to USD25,000 and one half of the remaining estate outright. Life estate The current law addressing the issue of life estate is not well drafted. For investments, the spouse will receive interest and dividends. If the real estate is rent - ed the income is easy to determine. If it is real estate, it is not straightforward, especially if the spouse and
relatives co-own it. The court has ruled that a petition to partition court action can commence to bifurcate the interests, and the spouse can receive the value of the life estate interest. Elective share Currently the elective share applies to probate assets and assets in a revocable trust. Massachusetts does not yet have an augmented estate that includes other assets against which the election can be made. There are frequent bills proposed to increase the elec - tive share. None have currently been passed. Prenuptial and Postnuptial Agreements Prenuptial and postnuptial agreements are valid in Massachusetts. There is no statute setting forth the rules concerning the validity of a prenuptial or post - nuptial agreement. Case law has shown that to be valid, the agreement should be in writing and execut - ed voluntarily between the parties. There is no require - ment that both parties retain counsel, but it is wise to do so. Massachusetts has adopted the “second look doctrine”. The agreement must be fair and reasonable at the time it is executed, and fair and reasonable at the time of the divorce. Each party must provide full and fair disclosure of all financial assets (including assets the person is reasonably expected to receive through gifts and inheritances whether outright or in trust). Any provision addressing child support or cus - tody is not valid. In the absence of a prenuptial agreement or postnup - tial agreement, the equitable division rules apply in a divorce and the spousal rights highlighted above Massachusetts follows 26 USC Section 1014 and affords a stepped-up basis for assets included in the gross estate (with the same two exceptions of assets that are “income in respect of decedent” and assets that are received by the decedent within a year of death, if that property is acquired from the decedent by the donor or by the spouse of the donor. As with federal law, when a lifetime gift is made, the donee takes the donor’s income tax basis. pertain in the event of death. 2.5 Transfer of Property
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