Divorce often means making difficult financial decisions, especially when you own property in another state. If you own out-of-state real estate, you may wonder how a Massachusetts court will divide it. Knowing how the process works can help you prepare.
Massachusetts follows equitable distribution
Massachusetts uses an equitable distribution system to divide marital property. This means the judge tries to divide property fairly, but not always equally. The judge looks at many facts, including the length of the marriage, each spouse’s role in acquiring property, the age and health of both spouses and each person’s financial situation.
Massachusetts courts generally can include out-of-state real estate when dividing the marital estate. This may include vacation homes, rental properties, land or other real estate.
Jurisdiction and enforcement challenges
Massachusetts courts can order spouses to divide property in another state, but you may need to take extra legal steps to complete the transfer. The court has authority over you and your spouse, but it generally cannot directly transfer title to real estate in another state.
Instead, you must follow the laws where the property is located. You may need to record documents or complete other legal steps before the transfer is complete.
Valuation of out-of-state assets
The judge may require appraisals or other documents to determine the current market value of out-of-state property. You should gather recent property tax assessments, appraisals and information about any mortgages or liens.
Where the property is located may affect its value and how easily you can sell it. Real estate markets vary across the country. Sharing complete information about these assets helps support a fair property division.
Tax implications to consider
Dividing out-of-state property may have tax consequences. Capital gains taxes, transfer taxes and other local taxes may apply, depending on how you divide the property. Each state has its own tax rules, and you may owe taxes in more than one jurisdiction.
Knowing the possible tax effects can help you understand how different property division options may affect you.
Planning for property division
Dividing out-of-state property can involve both Massachusetts divorce law and the laws where the property is located. Although Massachusetts courts can include these assets when dividing the marital estate, you may need to complete extra legal steps before you transfer ownership. Knowing how value, taxes and legal rules affect these assets can help you better understand what to expect during your divorce.