How Should Assets Be Split In A Divorce?

Determining how to divide a family's assets can be difficult during a divorce, especially if the family has substantial assets, such as a primary residence, a rental property or a retirement or pension plan, stock options or restricted stock or deferred compensation, brokerage accounts or closely-held businesses, professional practices or licenses, etc.—choosing who gets what may be a challenge, even in the best-case scenario. Disputed divorces make it difficult to deal with this.

It is not always appropriate to divide assets based solely on the amount of money that they are currently worth. Understanding the financial assistance that will help you in the long and near term is essential. This is why you need to hire a high-asset divorce attorney to help you deal with the problem.

This is not always straightforward to assess without a thorough understanding of the asset, including its liquidity, cost basis, and any tax consequences related to its sale.

Separate Property VS Marital Property

Before going to trial, you must have a solid understanding of the distinctions between separate and marital property and why this topic is of the utmost significance to you. It is highly recommended that you consult with a highly educated, high-asset divorce attorney when going through the divorce process.

Your first and most important consideration should be how the law in your state treats joint property ownership in married couples. The law governing how assets are divided may be community property or separate property, depending on the state in which you reside.

All marital assets are common property. Each spouse fairly shares the marriage property, income, and responsibilities accrued during the marriage and is entitled to share them equally. Separate property lets spouses keep original assets. You may retain the property you had before getting married or inherit.

Marital Property

The term "community property" refers to a legal distinction in the United States that identifies the assets of married couples. Any income earned or property acquired, whether real or personal, by either spouse during a marriage is regarded as community property and, as a result, belongs to both partners in the union. Everything is owned and owned equally by both parties in a marriage, regardless of who makes or spends the money. 

Separate Property

A property owned by one spouse alone and not by either of the partners in a marriage is referred to as separate property.

States define separate and marital property differently. Some conditions don't apply the "marital property" rule after a divorce. Even when a couple has officially split their marriage, each partner's earnings are considered independent property.

What to Prepare For Property Division

Make a list of your assets.

It is essential to be honest, open, and comprehensive. The judge may reopen your divorce case to reevaluate how the property is divided if your spouse later learns that you failed to disclose an asset during your divorce. In addition, you could face additional penalties because hiding assets to avoid property division is illegal.

Identify what your marital and separate properties are.

If you assert that something you acquired during your marriage is your separate property, you must provide evidence regarding the asset's origin or the funds used to purchase it. 

Seek professional help 

Don't gamble with your money when your mind and emotions are likely to be a mess. When dividing financial assets, it's best to seek the advice of an expert rather than depending on the well-intentioned advice of family members or colleagues.

Professionals can help you ensure that you've checked all the boxes, found all the accounts, and fully protect yourself from financial harm at this crucial time.