“You can’t always get what you want, but if you try sometimes, you just might find, you’ll get what you need”. As the song goes, so does the reality of marital asset division in family court.
Equitable does not mean 50-50. Equitable means dealing fairly and equally with all concerned. When a divorce matter is heard in family court, for a variety of reasons, asset division may not meet an exact 50-50 distribution. As such, it is always important take the following steps before you embark on the task.
1. Determine Priorities: What is most important when you consider age, work history, ages of children, custodial arrangements; is cash more important or is planning for the future? For example, both people may have a good source of income, but one started working later in the marriage (perhaps a stay at home mom) and is sorely in need of a retirement account. In this case a person may want to waive certain cash assets in return for a greater division of retirement money.
2. Make a Plan: Make a financial plan based upon post divorce financial circumstances. The plan should include education costs for children, health insurance costs, transportation and housing costs and retirement goals.
3. Prepare a Spreadsheet: Depending on the complexity of the estate, it may be important learn how to use Excel or, if you are a divorce lawyer, you will want to use software such as Settlyd. A spreadsheet will give you a “birds eye view” of all assets and debts and help you see the options more clearly.
4. Compare Apples to Apples: Be careful when you divide assets and debts. A retirement account will often have tax implications, while cash assets and equity in a residence will not. For example, a $50,000 401k will most likely have less value than a $50,000 mutual fund or a $50,000 payout from the equity in a residence.
The key to successful asset division is to approach the process in a rational frame of mind. This is often difficult as our emotions will undoubtedly cloud our thinking and make obtaining resolution difficult. Mediation and Collaborative Practice are both excellent options to assist people in reaching an agreement in a rational, non adversarial way.