Divorce is never easy, Asset Division is Harder
In addition to the pain and hurt feelings involved, there are also the legalities, which include splitting up your possessions. Who gets what in a divorce anyway? That is generally up to the couple, unless they are so divided that they have to let the courts decide the fate of their property. If you are going through a divorce, here are some tips on how to divide your assets in a way that you can remain amicable about it.
Where to Begin When Dividing Assets through Divorce
1. Equitable Distribution – The first thing you need to do is understand equitable distribution. Most states follow this law, and it is based on many factors, including earnings, contributions made by each spouse, age, health, and future financial needs. If you consider these equitable distribution before going to court, the judge will likely accept the agreement without making any amendments.
2. Separate and Marital Property – Not all property is going to be marital property. Most things that you acquired while together are considered marital property. Anything either of you brought into the marriage is separate property. This can include inheritances, heirlooms, insurance, and real estate. In most cases, separate property goes to the original owner of said property.
3. Asset Valuation – You will need to agree on an asset valuation date. This is when you put a fixed value on your property. Be sure to get updated balances on savings, CD’s, money, and market accounts. Calculate the equity in your home. You will also need to have the home appraised to get an accurate pay-off amount.
4. Personal Property – Both of you will need to claim your personal property. This includes clothing, accessories, and other items that each of you have purchased for yourselves, or have given each other as gifts. There likely won’t be any arguments during this stage of the divorce, since everything is personal items.
5. Household Goods – If there are household goods and other shared items in the household, such as computers, tablets and laptops, these will have to be divided as well. It may be a better option to sell laptops and other gadgets. Then, you can simply split the money, which is often a lot easier than deciding which of you gets to keep which gadgets.
6. Vehicles – Next you need to decide who gets to keep any vehicles that you may have. If a vehicle was owned by either of you prior to the marriage, it is considered your own personal property. If you acquired vehicles together, you will have to figure out whether one of you gets to keep said vehicles, or if you will sell them and split the money.
7. Sentimental Items – No matter how bitter either of you are, there are going to be items that hold sentimental value to both of you. These items can include, but are not limited to, family photos, souvenirs, and collectibles. You will need to make a list of these items, and figure out how to divide them. Photos can be copied, so that part will be easy. You can each have a set.
8. Your Home – The biggest challenge will be deciding on how to deal with dividing up your home. Both of you have a vested interest in the home. Your options are to sell the home or any other real estate and split the money, to divide the home, or to agree that one of you gets to keep the home and continue making mortgage payments, if there are any. This is known as transfer of equity, and it is often the easiest, and best option.