Dividing Assets In A Divorce
In a divorce settlement, you don’t get do-overs. Doing your
homework and enlisting the help of trusted professionals can
prevent costly mistakes.
Few times of crisis require immediate, clear-headed financial thinking like a divorce. From the time of
the split to the signing of the settlement, both parties will face making those decisions in a whole new
context – alone and with an adversary. In even the most amicable split, the decisions about who gets
what come with a mountain of emotional baggage.
Knowledge, as Sir Francis Bacon wrote in the 16th century, is power, so arm yourself by gathering every
scrap of information on your finances. Request your credit report – you are entitled to one free copy a
year from the three major reporting agencies – to check what you and your spouse owe. Open individual
bank, credit card and brokerage accounts. Close all joint accounts – a sometimes tricky task if those
accounts are sizable. Your attorney can help make sure you get your share of liquid assets.
At some point, one or both of you will leave the family home. This can be the most agonizing split
because of the emotional bonds the home represents. Women often jump to keep the house, often to
spare children the disruption of a move or because they perceive it to be the most valuable asset the
couple owns. Remember that home ownership involves a great deal more financial obligation than just a
mortgage payment. The partner who gets the house also gets the taxes, the utilities, the upkeep and the
payments to the spouse being bought out – all on one salary instead of two, or on no salary at all if the
spouse has stayed at home.
Rely on your own team of professional advisors and get first-hand information. Your team will include your
divorce attorney and may also include an accountant, financial professional and possibly an insurance
professional. This team will review your financial situation and make recommendations on possible
courses of action. If you’re paying by the hour, don’t use these people for emotional support – call a
A new budget can help head off the “splurge to purge” temptation many women face in a divorce. You
need extra TLC, but find ways that don’t cost money. Instead of that salon pedicure, invite a friend over
and do your nails together. Have a board game night with the kids instead of pizza and a movie. Get
used to your new reality of running a household on one salary, and avoid the pitfall of using credit now
thinking you can pay it off with your settlement money.
If your assets as a couple include investments, a business or items like antiques or collectibles, you’ll
need a clear view of their value as well as any hidden costs. On investments, for example, you will pay
taxes on capital gains from sales, and those gains can vary depending on the purchase price, or cost
basis. You may need the help of an investment professional, appraiser or forensic accountant to ensure
that what looks fair on paper will be fair when the settlement is finalized and, down the road, when assets
There’s no single best way to split assets during a divorce. Your best defenses are to be informed about
your assets and liabilities and to select a team of trusted professionals to help you weigh the pros and
cons of different options for splitting those assets an liabilities. Take a long-term view of self
preservation, not a short-term view of punishment or least conflict. Once the divorce has been settled,
you won’t get a chance to ask the judge to reconsider if you find you’ve made the wrong choices.
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