Divorce mediator Nicole K. Levy reviews the advantages of agreeing on a “marriage end date” for spouses mediating their divorce.
In the divorce process, questions often arise over how separated spouses should manage their financial affairs between the time the divorce process begins and the final entry of the divorce decree. Divorce is often emotional, but people still need to live and spend money, manage households, contribute to retirements, pay for children, and sometimes incur debt. This can be a messy time, and it helps for spouses to have a plan for addressing how expenditures and investments made during the divorce process will be treated in the final division of assets.
During discussions about asset division in divorce mediation, it is important for spouses to understand when the marital partnership ended and agree on a plan for how each spouse’s fluctuations in assets and debt values should be divided in the months leading up to the final divorce. Specifically, it is important for spouses to consider whether they will share responsibility for new debts incurred by either spouse during the divorce process, and whether the increase in the value of assets occurring during the divorce process will be shared between the spouses or retained by only one spouse.
This planning process tends to be significantly easier when spouses agree to set a specific “end of marriage date,” which is often the jumping off point for determining how assets/debts are acquired immediately before the divorce is official will be apportioned. Among the considerations for spouses when mutually selecting a “marriage end date” include whether the spouses are still living together (resulting in more shared expenses); whether the spouses have children (resulting in shared child-related expenses and child support considerations); and whether the spouses have separated their finances. An experienced mediator can help spouses determine a reasonable “end of marriage” date, and plan how assets and debts acquired after the “end of marriage” date, but before the final divorce date, should be treated in the final division of assets.
Table of Contents for this Blog
- Ambiguity About the End Date of the Marriage is Surprisingly Common
- How to Divide Assets/Debts that Arise During the Divorce Process
- What Does the Agreed Upon “End Date” of the Marriage Represent?
- Stipulating to an End Date During Mediation Can Reduce Conflict
- No Mediation Retainers with Pay-As-You-Go Mediation
Ambiguity About the End Date of the Marriage is Surprisingly Common
Sometimes spouses can point to a specific date that their marriage came to an end. However, for many divorce spouses, a definite end point is hard to identify. Many events can occur over a span of months or years that suggest the relationship is moving towards an end. For example, spouses can still be married, but sleeping in separate bedrooms or have completely segregated their finances from one another. Stronger signs of a divorce include spouses being legally married but no longer holding themselves out as a couple or living in completely different residences. However, even though spouses may not reside together, jointly-owned assets such as real estate or child-related expenses may continue to require financial contributions from each spouse.
Spouses who do not use the mediation process and are litigating their separation can usually rely on their attorneys to make arguments regarding the division of assets and debts that accrue during the pendency of the divorce filing. However, the Massachusetts divorce statute, M.G.L. c. 208 s. 34, provides for the division of all assets and debts without clarifying how assets and liabilities acquired late in the divorce process should be treated. Judges have broad discretion to divide assets and debts based on the value and a date of the judge’s choosing, including the date of separation, the date the divorce was filed, the last day of trial, the date the final judgment of divorce enters, or another date determined by the judge. (A judge must generally explain why he/she chose a particular date in his or her findings of fact, and such decisions are rarely overturned on appeal, even if the judge’s reasoning appears weak on its face.)
Couples going through mediation, on the other hand, have a leg up on litigating spouses: The mediation process enables spouses to agree on a “marriage end date” and plan how to divide assets and debts that arise after this date, in the weeks and months leading up to the final divorce decree. Uncertainty about an appropriate marriage end date can create significant complications over whether assets and debts accumulated late in the divorce process should be divided between the spouses or attributable to only one spouse.
How to Divide Assets/Debts that Arise During the Divorce Process
Every divorce is different, and there is no “one size fits all” method for determining whether spouses should share equally in assets/debts that arise late in the divorce process. For couples in which one spouse is the dominant wage earner, it may make sense to continue to share in assets/debts until the final divorce date. For spouses with more equal earnings, it often makes sense to make each spouse responsible for new debts that he or she incurs late in the divorce, and for each spouse to retain their respective retirement or savings accrued during this period.
Among the considerations for spouses is the type of asset subject to this question. For example, if two spouses co-own real estate, and both spouses contribute to the mortgage and expenses of the home during the divorce, logic often dictates that the spouses will share equally in any increase in value in the home that occurs during the divorce. If one spouse is paying for the property alone, it may make sense for that spouse to receive a credit in the division of assets for mortgage principal (or major repairs or improvements) that he or she paid during the divorce, while continuing to share equally in appreciation resulting from market gains that occur during the divorce.
In contrast, spouses sometimes agree that retirement plan contributions made by each spouse during the divorce process should be solely retained by the contributing spouse in the final divorce. Perhaps the most frequent area of agreement between mediating spouses is that new credit card debt incurred by each spouse during the mediation process will be paid by the respective spouse in the final divorce.
By agreeing how these assets and liabilities will be divided at the start of the divorce process, mediating spouses avoid unpleasant surprises later on, while reducing stress and tension over how expenses will be paid during the divorce process.
What Does the Agreed Upon “End Date” of the Marriage Represent?
In divorce terms, there are four phases of the marriage worth considering during asset division. The first is the pre-marital phase, in which the concern is dividing assets acquired by either spouse prior to the marriage. The second and most significant phase is the marital phase, which concerns the division of assets acquired during the marriage. The third phase is the pendency of the divorce, which is the period after which the parties have decided to seek a divorce, but the divorce is not yet finalized. The fourth and final phase is the post-divorce period, after the divorce is finalized.
This blog is primarily concerned with the third phase – the pendency of the divorce – for which spouses must consider how to treat assets and debts that arise during the divorce process. In this context, agreeing on an “end date” for the marriage is a way for couples to determine how the assets and debts acquired during the divorce process should be handled.
For example, assume that two spouses decide to start divorce mediation on January 1st of a given year, with a goal of finalizing their divorce in front of a judge by August 1st of that year. If the spouses decide that February 1st will be the “end date” of their marriage, then all assets and debts acquired by each individual spouse after February 1st will solely belong to that spouse. Thus, all increases (or decreases) in retirement and savings account after February 1st that each spouse experiences would have no effect on the final division of assets, and all debts incurred by an individual spouse after February 1st would be the sole responsibility of that spouse.
After agreeing on an “end date” for the marriage, the spouses can then agree on how to share any joint expenses (such as child related expenses or costs associated with jointly owned real estate), so that each spouse understands what his or her financial responsibilities will be during the remainder of the divorce process.
Stipulating to an End Date During Mediation Can Reduce Conflict
In most divorce situations, separating and mediating spouses are unable to simply put their purchases on hold while they work through their disagreements. Mediation (and litigation) can take some time, and life’s circumstances often demand that purchases be made. The inconvenience of making expenditures without a plan is often far greater than working out what will happen to the property later. The same goes for debts, as many couples cannot pay off all debts before beginning the mediation process.
A starting point for divorcing spouses is often to agree to an intended ending date for your marriage, even if you are still working through the divorce mediation process, and even if you and your spouse recognize that there exists the potential for reconciliation. The proposed end date does not need to be etched in stone, but it allows for planning, mutually advantageous problem solving and the establishment of respectful boundaries during the divorce process.
Whether the date is a vague estimate of when you and your spouse knew you were going to go through the divorce process or whether it represents a date on which a significant step was taken towards separation, by choosing a date to the end of your relationship will allow you and your spouse to make arrangements based on your own funds.
No Mediation Retainers with Pay-As-You-Go Mediation
We now offer pay-as-you-go mediation at South Shore Divorce Mediation. Under pay-as-you-go, you are only charged for the mediation services you use, when you use them. There are no retainers, up-front costs or commitments. Call today at (781) 253-2049 to schedule your first session.
Nicole is a divorce mediator and mediation coach for South Shore Divorce Mediation, with offices in Hingham, Massachusetts and East Sandwich, Massachusetts. She is also a collaborative law attorney Senior Associate Attorney for Lynch & Owens, P.C., where she specializes in divorce and family law issues. Nicole is a statutory mediator under M.G.L. Ch. 233, s. 23C and a proud member of the Massachusetts Council on Family Mediation.
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