Asset Division in Divorce: Types of Assets
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.