Dividing Your Property During Divorce
How to divide property during a divorce.
For many divorcing couples, dividing property, such as furniture, sports gear, collectibles, pictures, cars, homes, and money can be a very difficult part of the divorce process. But don't despair; there are several approaches spouses can take to arrive at a fair split of their possessions.
The vast majority of divorcing couples are able to sit down together and decide who gets what, and this is generally the best way to handle this issue. When that's just not possible because of a dispute, inability to compromise, or a complex issue regarding the ownership or value of property, both spouses may have to hire attorneys to negotiate on their behalf or even go to court and ask a judge to divide the marital estate (property owned jointly by the couple).
Here are some tips on how to get through this process with your dignity and sanity intact.
Dividing Up Property Yourselves
If you and your spouse are going to try to divide your property yourselves, here are some steps to get you started.
List your belongings. Working together, make a list of all of the items that you own jointly. Of course, you can omit items both of you agree are personal things of insignificant value. And, for example, when dealing with old furniture that won't sell for much anymore, you can just specify "furniture in master bedroom," "dining room furniture," and so on.
If you're going through this process, you'll have to give your spouse information about all of your property, which includes everything of value you have come to own during your marriage. It's important to be open and completely honest about all property you are aware of. So, if you still have that little bank account you secreted away five years ago when the two of you were thinking about splitting up, you'll need to fess up and identify that too. Because both spouses have a right to discover financial information about the other (by using a subpoena if necessary), these types of assets always surface sooner or later, and the penalties for hiding something of value can be very serious. Honesty is the best policy in this case.
Value the property. Try to agree on the value of anything worth more than a specific agreed amount -- say $100 or $500. If there is a house, a business, or anything that's difficult to value, get an opinion about that from some agreed-upon outside authority. For example, for your house, pick a realtor who is familiar with your neighborhood. Or, for antiques, you can hire a professional appraiser. You may need an actuary to value a pension and an accountant to help you value an investment. If you have a mortgage or other debt associated with any item, be sure to subtract the amount of the debt from its value so that you list its net value.
Decide on the logical owner. Now go through your main list, item by item, and decide whether there is some good reason to have each piece of property go to one or the other of you. Start with the biggest value items and see how far you can get. If having an equal split is important to you, keep track of the total value each person accumulates. Later, trade off on the smaller items, with each of you taking one in turn.
Get the judge's approval. If you and your spouse can agree on dividing the property you own together, the court will normally approve whatever agreement you've reached. The only exception is when a party who doesn't have a lawyer seems to have agreed to take a lot less than half of the property. In that case, the judge may want to ask a few questions to be sure that one of you isn't taking advantage of the other. But don't count on this intervention in every case.
If it becomes difficult to proceed as suggested above, it may be helpful to try a few additional methods.
Coin flip I. Flip a coin and have the winner divide up all the items into two lists. Do not break up sets of things, such as dishes and tables with matching chairs. The loser of the coin flip then chooses which list he or she will take; the remaining list belongs to the listmaker.
Coin flip II. Flip a coin and have the winner place a monetary value on each item on a list of items to be divided. The other person then chooses the items he or she wants, up to one-half of the total value of all the items on the list. The person who won the flip is awarded what remains.
This method can also be used for one item at a time: The first person places a value on an item, such as the car, and the other person either takes it at that value, or it goes to the first person at that value.
Hold a sale. Hold a garage sale and divide the proceeds equally.
Entertain bids. On items of substantial value -- a house, a business, an expensive car -- have each spouse submit a sealed bid; when the bids are opened, the highest bidder gets the item. For example, if you have an expensive antique and one of you bids $8,000 and the other $9,000 on it, the higher bidder gets the item at its listed value. An equalizing payment is made at the end of the process.
Auction it off. Hold a real auction with a neutral person acting as auctioneer and the two spouses being the only bidders allowed. Any increased bids should be a minimum percentage, such as 5%, over the last bid. Otherwise, the parties might be able to force the proceedings to drag on into the night as they raise one another a dollar at a time.
Want Further Information?
For more commonsense tips on getting a divorce, see A Judge's Guide to Divorce: Uncommon Advice From the Bench, by Judge Roderic Duncan (Nolo).