(Credit:longislandbankruptcyblog.com)
In Massachusetts, a divorce court attempts to distribute the marital estate in a fair manner. What if your soon-to-be ex-spouse's parents are very wealthy and plan on giving most of it to your spouse when they pass away? Can you expect a piece of the inheritance during the divorce process? The short answer is. . . . no. However, there is a way to let the judge know your spouse's future opportunity to acquire assets will be significantly greater than yours due to the expected inheritance. A document called a Vaughan affidavit can greatly assist a party whose ex-spouse is in-line to inherit the family fortune.
Hypothetical Situation
Let's assume that Husband and Wife have been married for 15 years, they do not have kids, and they each hold middle income jobs. Wife files for a divorce in Massachusetts. Wife's parents, who are retired, were the owners of several successful chain restaurants and have an estimated net worth of $2.3 million. The Wife's parents have dome some estate planning and will leave all of their assets to Wife when they pass away.
Husband wants a portion of Wife's expected inheritance as part of the divorce settlement. He is
Vaughan Affidavit
Massachusetts law does not allow for Husband to take part of the expected inheritance during a divorce proceeding. Even though Wife's parents have a net worth estimated at $2.3 million, it is not guaranteed that the Wife will inherit a single penny. There are numerous reasons that could reduce or eliminate the Wife's parents' assets. For example, the stock market might crash, the vacation home might go up in flames and not be covered by insurance, there may be significant future medical bills, there may be significant back taxes, the parents might change their minds and not leave anything to Wife etc. Therefore, divorce courts do not divide a spouse's possible inheritance during a divorce.
However, Mass. General Laws ch. 208, § 34 requires a court, when determining alimony and an equitable division of the martial estate, to consider certain factors, including a party's "opportunity for future acquisition of capital assets and income." Thus, if a party is going to inherit a significant amount of money or assets, that party will have a good opportunity to acquire future assets, a factor the judge should know about.
To find out how good of an opportunity a spouse will have at acquiring future assets, a party, through counsel, should request a Vaughan affidavit from the soon-to-be ex-spouse's parents. The Vaughan affidavit was named after a Massachusetts divorce case decided in 1991. The Vaughan affidavit is unique to Massachusetts divorce law. It provides a way for a spouse's parents to give a general description of their assets and potential inheritance to spouse. The affidavit strikes a balance between the spouse's parent's privacy interests and a divorcing party's need to discovery important information that might affect a divorce settlement. If a spouse's parents give a sufficient Vaughan affidavit, it eliminates the need for invasive prodding into their financial information.
Closing Thoughts
It is important to note that the Vaughan affidavit technique applies only in Massachusetts. If the spouse's parents reside outside of Massachusetts, the Vaughan affidavit may not have any legal significance. Other methods, such as requesting estate planning documents or sending out subpoenas for such documents, may be appropriate.
If the spouse's parent refuse to give the Vaughan affidavit, there are techniques that counsel may use to discovery the information.
Legal counsel should ask for a Vaughan affidavit if the circumstances suggest that a spouse will be receiving significant inheritance. Real world warning: if one requests a Vaughan affidavit from a spouse's parents, one must warn their own parents to expect to receive a Vaughan affidavit request themselves. One might prepare their parents for this possibility--an awkward conversation for some. Many do not talk with their parents about estate planning until they are forced to do so by a Vaughan affidavit request.
Although the Vaughan affidavit may appear to be a small portion of a divorce case, for some, it can have a significant life-long impact.
By: Geoffrey R. Farrington, Esq.
www.Bohnet-Romani.com
Twitter: @FarringtonLAW
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