Friday, June 25, 2009, was "Take Your Dog To Work Day."  Mindy, a/k/a Lawdog, enjoyed a "day of beauty" at the Soapy Dog in Weymouth, and then spent the day with me at the office.  Mindy loves being in the office and meeting clients.  She is a ten year old Bearded Collie I rescued from Pittsburgh, Pennsylvania, about nine years ago.  Mindy enjoys long walks, riding in her 78 mustard colored MG (Putt Putt) and getting bonies from all the local banks.  She is really "woman's best friend."

 

Massachusetts General Laws Chapter 208, Section 34, allows a judge to "assign to either husband or wife all or any part of the estate of the other."  Under this law a party's "estate" includes all property to which the party holds title however acquired, including gifts and inheritances.  The judge's exercise of discretion in allocating or awarding distributions in an equitable jurisdiction, requires that he/she will be mindful of the considerations under Section 34 of "the opportunity of each for future acquisition of capital assets and income" in determining how to decide the disposition of property that is subject to division.
 
Family derived assets, which may include interests in trusts, gifted property, or inherited property, as well as any family owned businesses, present unique situations.  While it is clear that family derived assets are includable as part of the marital asset, there is no mandate as to how the marital estate must be divided.  Therefore, if a gift is made to a child during the marriage, particularly on a regular and consistent basis, such facts will have a direct and factual bearing on any future divorce.  If a family owned business is given to a child, that becomes his/her asset, and as such, it is an available asset in a divorce.  The valuation of the entire business may be considered in determining the divorcing child's interest in the business.  Parents should consider the implications and ramifications of a potential divorce, as they consider various estate planning options.
 
A greater concern is the concept that the pattern of gift giving from parents to a child may very well result in that parent's estate plan being discoverable in the child's divorce proceeding.  In the matter of Vaughn v. Vaughn, a Massachusetts Supreme Judicial Court case, the wife sought to obtain discovery, that is to obtain documents, about the husband's parents' estate plan, including their wills, trusts, and other documents.  In that case, the parties had been married for 21 years, had no children, and each party earned a modest income.  However, because of the generosity of the husband's family, the parties enjoyed a lucrative lifestyle, due to annual gifts from husband's grandmother, and the home from the husband's parents for which they paid a nominal amount of rent.  The parents agreed to disclose all of the husband's vested interest in their estates, but refused to disclose any other financial information, alleging any other interest their son had in their assets was not vested and was merely an expectancy.  The parents filed a Motion for a Protective Order and to quash the subpoenas that had been issued for their deposition.  After a hearing, the trial court denied their motion.  The judge in the lower court did attempt to minimize the burden placed on the parents by allowing them to comply with the discovery order by allowing them to file an affidavit stating:  1)  their approximate current and total net worth (+/- $500,000); 2)  a general description of their current estate plan and wills; and 3)  the date that the estate plan or wills were last amended.  The parents were clearly unhappy about the order and sought relief by presenting an appeal in the Appeals Court.  The Appeals Court denied their petition, and the parents then petitioned the single justice of the Supreme Judicial Court.  The Supreme Judicial Court single justice held that the husband's expectancy interests were not subject to division, but a probate court judge could properly consider them when determining how to divide property that was subject to division.  Additionally, the Court stated that the probate court judge had carefully balanced the parents' right to privacy and confidentiality regarding their estate plan and their assets, and on the other hand, the wife's right to discover her husband's future likelihood of acquisition of capital assets.
 
Since 1991, the Vaughn case is used routinely to seek information about the estates of their soon to be ex-in-laws, using what has come to be known as a "Vaughn Affidavit."  These affidavits may also be used in the event that another party's grandparents or earlier ancestors had assets, trusts, or other documents as part of their estate plan in which the other party is named as a beneficiary.  In Massachusetts, the Vaughn Affidavit is considered to be a reasonable compromise regarding the spouse's right to know about the acquisition of future capital assets and the other spouse's parents' right to keep their estate plan and assets confidential.  If the spouse's parents reside outside of Massachusetts, the law of the other jurisdiction may prevail.  The issue of inherited wealth or related subjects should be raised in the early stage of the divorce case in order to insure that all documents have been fully and completely disclosed.

On July 1, 2009, Massachusetts made significant changes to the procedure to obtain an appointment as a guardian and/or a conservator.  Additionally, all of the forms have also changed.  All individuals who are contemplating filing a petition for guardianship or conservatorship should be aware of these changes that have been implemented.  The new forms are available on the Plymouth County Probate & Family Court website at www.pcpfc.com.