Types of Assets
Throughout our lifetimes we acquire all sorts of things. We work hard to purchase the things we desire from cars to homes to vacation properties. We also acquire retirement plans, investments, and savings accounts. Some of these assets are acquired before marriage and some are gained during marriage. Unfortunately some marriages come to an end and these assets must be divided. This can be a tricky process and it’s important to understand your rights and responsibilities when it comes to splitting assets and dividing retirement plans. You’ll need to have a solid understanding of what assets the couple holds and what they are all worth. It’s advisable to hire some professionals such as an attorney and an accountant or actuary to help with this process.
Which Assets Must Be Split?
There are basically two types of assets when it comes to divorce, communal and individual. Communal properties are generally defined as anything gained during the marriage. This commonly includes homes, cars, retirement plans, savings accounts, investments, and other valuables. These communal assets are the ones that will be split during the divorce proceedings. Some of these items are easier to split than others. For example, a savings account is rather straightforward. According to the court order each spouse will simply take the percentage they are entitled to. Retirement plans are similar in nature. A court will often order each plan to pay each individual a certain percentage for a defined period of time. It gets a little trickier when it comes to dividing physical assets such as houses and cars. Obviously these assets can’t simply be cut in half and given to each spouse. Often times one spouse will be required to “buy the other spouse out” of the home or vehicle. This would mean the spouse keeping the house would have to pay the other for their share of it. Other times couples may choose to sell these assets and share the profits from said sales.
What Assets Aren’t Shared?
In general, most assets couples have will be considered communal and therefore up for division as part of a settlement. This often includes savings accounts that were held by one individual before the marriage because they will usually have been contributed to during the marriage. Assets that are covered under a prenuptial agreement are typically the only ones safe from division as part of a divorce settlement. These agreements, which are made before the marriage and signed by both parties in front of witnesses, define what assets will go to which spouse in case of divorce or separation.
Before the Settlement
In order to make sure a settlement is fair and accurate it’s critical to make sure you have an accurate understanding of exactly how much all of your assets are worth. Since homes are often a big part of divorce settlements, it’s wise to have your home professionally appraised so you know exactly what its market value is when negotiating the terms of your divorce. Likewise, check the bluebook values for any vehicles you may own. You certainly wouldn’t want to pay the sticker price for a 5-year-old car just because you didn’t do the research. Retirement plans and investments may be a little trickier to value but are very important, as they will ensure your financial future. A qualified accountant or actuary should be able to help you sort out these assets. Remember; while it may seem like hard work determining all of these values, your future financial security and the fairness of your divorce settlement rest on knowing exactly what the values of your assets are.
Laws vary from state to state regarding the division of assets so it’s important to talk to a professional with a lot of experience with similar cases in the local area. An attorney will be able to advise you on your rights and responsibilities and ensure that you get a fair settlement. An accountant or actuary will be able to help put values on retirement plans and investments. These will be major parts of your divorce settlement so it’s important to have a professional keep a close eye on the proceedings. One thing is for sure; no state will finalize your divorce without first ensuring that all assets have been divided between spouses.
Which Assets Must Be Split?
There are basically two types of assets when it comes to divorce, communal and individual. Communal properties are generally defined as anything gained during the marriage. This commonly includes homes, cars, retirement plans, savings accounts, investments, and other valuables. These communal assets are the ones that will be split during the divorce proceedings. Some of these items are easier to split than others. For example, a savings account is rather straightforward. According to the court order each spouse will simply take the percentage they are entitled to. Retirement plans are similar in nature. A court will often order each plan to pay each individual a certain percentage for a defined period of time. It gets a little trickier when it comes to dividing physical assets such as houses and cars. Obviously these assets can’t simply be cut in half and given to each spouse. Often times one spouse will be required to “buy the other spouse out” of the home or vehicle. This would mean the spouse keeping the house would have to pay the other for their share of it. Other times couples may choose to sell these assets and share the profits from said sales.
What Assets Aren’t Shared?
In general, most assets couples have will be considered communal and therefore up for division as part of a settlement. This often includes savings accounts that were held by one individual before the marriage because they will usually have been contributed to during the marriage. Assets that are covered under a prenuptial agreement are typically the only ones safe from division as part of a divorce settlement. These agreements, which are made before the marriage and signed by both parties in front of witnesses, define what assets will go to which spouse in case of divorce or separation.
Before the Settlement
In order to make sure a settlement is fair and accurate it’s critical to make sure you have an accurate understanding of exactly how much all of your assets are worth. Since homes are often a big part of divorce settlements, it’s wise to have your home professionally appraised so you know exactly what its market value is when negotiating the terms of your divorce. Likewise, check the bluebook values for any vehicles you may own. You certainly wouldn’t want to pay the sticker price for a 5-year-old car just because you didn’t do the research. Retirement plans and investments may be a little trickier to value but are very important, as they will ensure your financial future. A qualified accountant or actuary should be able to help you sort out these assets. Remember; while it may seem like hard work determining all of these values, your future financial security and the fairness of your divorce settlement rest on knowing exactly what the values of your assets are.
Laws vary from state to state regarding the division of assets so it’s important to talk to a professional with a lot of experience with similar cases in the local area. An attorney will be able to advise you on your rights and responsibilities and ensure that you get a fair settlement. An accountant or actuary will be able to help put values on retirement plans and investments. These will be major parts of your divorce settlement so it’s important to have a professional keep a close eye on the proceedings. One thing is for sure; no state will finalize your divorce without first ensuring that all assets have been divided between spouses.