One of the first things clients want to know about the divorce process is, “How will we divide our property?” Of course, there is no surefire answer to this question because as I always say, every single case is different.
However, it can be safely said that the usual starting point for the division of assets is that while property and debts are treated alike, they’re to be divided fairly and equitably. Generally, we start with a presumption that the marital estate is frequently divided 50/50.
What Happens to Major Assets?
With the presumption that the properties and debts will be split equally, we review individual assets. One of the first things we deal with is what will happen to the house (assuming that they own a house).
The easiest way to solve the question of, “What about the house?” is when both parties agree to sell it and split any net equity. Or, perhaps after they agree on the value of the house, they will also agree that one of them can have it as part of the overall property division.
Other major assets to look at are cars, land, stock, retirement accounts, and debt, among other things. Each family is different and has different assets that they bring to the table.
Now, if a Marital Agreement [prenup] was signed and is found to be enforceable, the terms of that agreement will come into consideration as well (and I highly suggest that every couple sign a premarital agreement before they tie the knot).
Dividing assets can seem fairy simple when you consider the values on paper. However, there are two major challenges I see time and time again that can make the process very difficult and drawn-out…
The Emotional Aspect of Divorce
Frequently, there is an intense emotional component that has to be taken into consideration, especially if there are children in the marriage.
If the mother wants to keep the house, the father may say, “Well, I don’t want her to have the house because that’s where the children have grown up and they will want to be at that house instead of spending time with me. That’s what they’re used to.”
When these emotions come into play, the disagreements become more heated and can escalate quickly.
Sometimes, one party may insist on keeping the house but cannot afford it on a single income. In this case, the party who wants the house may attempt to back into an unequal division of property so that she or he can afford to keep the house.
Years ago, I worked on a case where the wife wanted to keep the house (my client was the husband). Looking at the other side’s proposed division of property which would have allowed her to keep the house, she was asking for about 80% of the assets.
Of course, we didn’t agree. As a result of the fact that she had so much emotional investment tied up in the house, we had to go to trial. The judge made an immediate ruling in favor of my client… However, this “victory” meant that both sides ended up paying for a very expensive trial simply because the wife’s judgment was clouded. Additionally, the animosity from the trial made it more difficult to co-parent.
One of the most important reasons to hire a good attorney for your divorce is simply because when people go through such emotional life changes, they often don’t think rationally. A seasoned attorney sees the situation clearly and will anticipate potential ramifications during the divorce process.
In my next post, I’ll talk about the second most difficult challenge I see in dividing the assets during a divorce.