Marital Estate

What is Included in Marital Estate?  The husband appealed the decision of the trial court granting a portion of premarital property to his wife.  The Appeals Court, interpreting the then-recent c.208 s.34, held that courts have the discretion to assign to one spouse property of the other spouse “whenever and however acquired” – including premarital property.   The Court emphasized that the flexibility was essential in dealing with the various fact situations in each divorce and in order to arrive at a fair financial settlement in each case.  Rice v. Rice, 372 Mass. 398 (1977)
 
Equitable not Equal / Contribution is Key.  A division of assets is not presumptively equal – the statute requires an equitable distribution not an equal one.  In arriving at the division, the critical factor is the respective economic and non-economic contributions of the parties.  As the Court put it: “[t]he parties’ respective contributions to the marital partnership remains the touchstone of an equitable division of the marital estate.”  Moriarty v. Stone, 41 Mass. App. Ct. 151 (1996)
 
Professional Degree Not a Marital Asset.  While the definition of what is included as an asset for purposes of division, it is not without limit.  Here, the trial court held that the present value of the husband’s medical degree was an asset subject to division.  On his appeal, the Supreme Judicial Court disagreed, holding that the present value of future earned income including a professional degree is not an asset subject to division.  Since future earned income is speculative, it would be unfair to treat its present value as a property division – as property division, unlike support, is not modifiable.  Drapek v. Drapek, 399 Mass. 240 (1987)
 
The Not So Ineffably Speculative Partnership Interest.  The Husband in this case objected to the trial court’s division of his partnership interest, arguing that it violated Drapek’s prohibition against treating future earned income as an asset.  The Supreme Judicial Court rejected the argument, noting that “an interest in a partnership is not so ineffably speculative that it resists present valuation.”  The SJC went on: “the value of an interest in a partnership is distinguishable from the expectancies at issue in Drake.”  Expectancies, unlike partnership interests, according to the Court, “do not embody either a present or future enforceable proprietary right or reflect a steady record of past distributions of income that facilitates a reliable assessment of the asset’s present value. For instance, a medical degree …. grants a putative doctor the simple right to practice medicine, not an entitlement to inclusion in a medical business organization and a share of its prospective profits. By contrast, an interest in an established partnership, though subject to degrees of uncertainty and the contingency of future performance, has more than theoretical value.” Adams v. Adams, 459 Mass. 361 (2011)
 
Pending Lawsuit is Divisible Asset.  In a divorce proceeding, the judge properly considered a party’s interest in a pending lawsuit as part of the marital estate subject to division under G. L. c. 208, § 34, and, where the valuation of that interest was uncertain, the judge properly entered an order directing that future recovery, if and when received, be divided according to a fixed formula.  Hanify v. Hanify, 403 Mass. 184 (1988)
 
Attorney’s Contingent Fee Interest is Divisible Asset.  The wife here was an attorney who had an interest in a contingent fee agreement of a pending lawsuit.  The trial judge excluded the asset and the Supreme Judicial Court reversed.  The Court likened the interest to that of a litigant in a pending lawsuit and, in accordance with Hanify, determined that it was property subject to division under c. 208 s. 34.   Lyons v. Lyons, 403 Mass. 1003 (1988)