When a couple is divorcing or separating, they generally have a variety
of assets that will need to be divided between them. Assets might include
a home or other real property, a business, bank accounts, or retirement accounts.
Below is a list of the most common assets divided in a divorce. Consult
state law or your divorce lawyer to determine which assets you should
be looking for.
What Kind of Assets Are Divided in a Divorce?
Money: You and your spouse likely have some financial assets. These financial
assets generally include bank (your checking and savings), investment
accounts, stocks and bonds, mutual funds, and cash. Accounts held in your
minor children’s names or jointly with another person should also
be considered. You may be able to find a list of all money accounts by
reviewing the 1099 Forms used to complete your Income Tax Forms.
Home: Your home is an asset, as is any other real property (property that does
not generally move, like land or a building). If you are not sure of what
real property you and your spouse own, you may be able to find real property
by checking with the Assessor’s office to find out if a deed to
the property has been recorded. If you or your spouse own a business,
the real property owned by or through that business is also an asset.
Debt Repayment: If you or your spouse loaned money to someone, and you are owed repayment
of that debt still, that debt is an asset.
Deferred Compensation: Occasionally, an employee accumulates deferred compensation through his
or her employment. This deferred compensation might be a bonus that accrues
over time and is paid later (for example, a year-end bonus), an option
to purchase stock, or a raise. A contract to perform something for compensation
may also be an asset.
Retirement Accounts: Retirement accounts are assets. This includes 401(k) accounts and pensions.
The laws are different in every state, so it is advisable to consult a
divorce attorney when dividing your retirement accounts, and you should
also consult federal tax laws relating to the division of a retirement account.
Business: A business, along with the property owned by that business, including
accounts receivable, is an asset. You should consult the laws of your
state to determine how a professional practice is valued in a divorce.
Taxes: Tax refunds, or carryover tax losses are also assets that you should
keep in mind. There are specific rules for which tax credits you can claim.
Credit Cards: A credit card account can include assets that should be divided. Some
credit cards accumulate airline miles or points for other purchases. Those,
and your frequent flyer miles, are an asset as well.
Patents, Copyrights, Trademarks, etc.
Vehicles, RVs, Boats, etc.: Because these assets are easily moved, you should document them early
in your divorce.
Collections, Antiques, and Artwork: Collections, antiques, and artwork around your house are assets that
are sometimes quite valuable. Because these assets may be smaller and
easy to move, they are more likely to disappear. You should make a record
of them early in your divorce process.
Household Goods and Furnishings: Your regular household goods and furnishings are also assets. In many
states, your household goods and furnishings will be valued at “yard
sale price.” You should consult the laws of your state to determine
how these assets will be valued.
Insurance Policies: Life insurance policies may be an asset. Some insurance policies have
a cash value (for example, whole life insurance) because they develop
a savings as premiums are paid. For whole life insurance policies, the
insured may cash out the policy or take loans on the policy. A term life
insurance policy (those policies for only a specific period of time) does
not have a cash value, but may be used to secure future support payments.
Degree or professional license: If and how degrees and licenses are valued as assets varies by state.
Consult your divorce attorney to determine if these are an asset in the divorce.
What if I Think My Spouse is Hiding Assets from Me?
Generally, you and your lawyer can conduct a legal process called discovery
to help you find out what assets there are and where those assets are
located. Discovery may involve sending written questions (interrogatories)
to your spouse, requesting that a third party (like a bank) produce documents
to you, or depositions (taking testimony from a person who might know
where your assets are).
What discovery is allowed, and the deadlines for starting and completing
discovery, vary. Some states require a spouse to produce certain documents
without waiting for a discovery request, and some states or courts limit
the number of interrogatories you can send. You should consult the laws
of your state, and the specific rules of the court where your case is
located, to determine what discovery is allowed.
You might also be able to find some assets by reviewing your original tax
returns and supporting documents, such as 1099 Forms.
How Do I Know the Value of My Assets?
For some assets, you will be able to determine the value fairly easily
(a checking account with a specific amount held in it, for example). For
other assets, you may need to have an appraisal performed or to have an
accountant determine the value. You should keep in mind whether the cost
of an appraisal will be worth your while when valuing your assets. You
should also consult the laws of your state to determine what you will
need to do in order to be able to present or prove your values to the court.
What about High Asset Divorces?
If your divorce involves high assets or high net worth, the division of
assets will be much more complex. You will need to consult with a divorce
attorney who has extensive experience in the protection, valuation and
distribution of significant assets.
For more information about complex high-asset divorce, read our article on
High Net Worth Divorces.
If you need to speak with an attorney about asset division,
contact a McKinley Irvin divorce attorney.