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Inheritances in Divorce
1. Inheritances
In Massachusetts, property inherited by one spouse, before or during the marriage, is considered marital property and may be subject to “equitable division” in a divorce. This often comes as a surprise to divorce litigants, because in many other states inherited property is not subject to division. In my experience, the spouse whose inheritance is at stake usually feels entitled to keep the entire amount, while the other spouse thinks a 50/50 split is the fairest solution.
The principle of “equitable division” does not require the judge to divide inherited property equally between the two divorcing spouses. A review of the reported cases indicates that the judges have a great deal of discretion in this area, and there is no uniform rule. The factors used to justify a particular decision about division of inherited property have included (a) length of the marriage, (b) how long before the divorce the inherited funds were received, (c) whether the inherited assets were used to maintain the marital standard of living, or instead kept separate, (d) the value of the inherited funds in relation to the value of other assets being divided, and (e) the respective contributions of the parties to the marital enterprise as a whole.
2. Expectancies
A divorce litigant with an elderly parent who is likely to leave him an inheritance has an “expectancy.” An expectancy is not considered to be marital property, and is not subject to “equitable division.” But it can affect the division of the marital property. A probate judge may be inclined to award less of the marital property to the spouse who is expecting a substantial inheritance.
3. Discovery
Parents of divorce litigants sometimes receive subpoenas, demanding copies of their wills and other estate planning documents and a detailed list and valuation of their assets, and commanding their attendance at a deposition, so that the other spouse can learn about a likely inheritance. The parents will often then move for a protective order prohibiting discovery of their financial information, on the grounds of annoyance, embarrassment, oppression, undue burden, and invasion of privacy. These disputes are often resolved by an agreement or a court order requiring the parents provide a so-called “Vaughan Affidavit” instead of the requested information.
In the Vaughan v. Vaughan case, the Massachusetts Supreme Judicial Court, ruling on a petition for protective order, endorsed a suggestion made by the trial judge: that the husband’s parents could avoid a deposition and document production by providing an affidavit disclosing their approximate current total net worth (plus or minus $500,000), a general description of their current wills and other estate planning documents, and the date when those documents were last amended.
February 15, 2008