5 Steps for Dividing Assets in Divorce
Dividing assets during a divorce can be a very stressful exercise for everyone involved. Here is a 5 step approach to splitting your marital assets (community property) during your divorce.
1. Identify your Assets and Debts
Making a list of all your assets and debts should be the first step. You can write the list on paper, a spreadsheet, or use our SplitFairy software which will save you time later. For each asset in the list, you need to add a short description of the property. Some assets that most couple have and should be listed are cash, bank accounts, household furniture, jewelry, real estate, retirement and vehicles. Debts include credit card balances, student loans, car loans and home loans.
2. Value your Assets and Debts
For bank accounts and debts – the asset value is simply the balance of money in the accounts. Here are some popular online resource that you can use to get an estimated value of your assets:
- Homes: Zestimate in Zillow.com (enter your address in the search box and you will see “Zestimate” in your home listing).
- Cars: Kelley Blue Book – kbb.com (click on “Car’s Value” and enter the car’s information)
- Jewelry: Worthy – worthy.com
- Stocks and retirement accounts: Look online or your most recent broker’s statement
3. Assign Assets and Debts
Most likely, there are going to be assets that one spouse would like to keep after the divorce – like a car, house or furniture. If the other spouse doesn’t mind – go ahead and assign these assets to the spouse who wants it. Keep in mind that you may have to sell or re-assign the assets to the other spouse if the asset values don’t balance in the next step.
4. Balance to make it fair
For each spouse, add the value of all their assets (and subtract debts). Now start balancing the allocation of assets by moving assets from the higher value spouse to the lower value spouse until you get to a 50-50 allocation.
Balancing can be complicated, as you need to consider the tax implications and fees associated with sale of assets.
5. Agreement of the Division
You can tweak the allocation of assets and debts until both of you agree to the final assignment. You and your spouse sign off on this in your final settlement.
SquareFairy’s SplitFairy calculator helps divide all your assets for you by performing all the above steps. You can create an online list of all your assets and debts, provide value to each of the assets, assign the asset to either spouse, sell or let SplitFairy decide, and use SplitFairy’s intelligent balancing software that maximizes what you end up with by minimizing fees and taxes that result from selling assets.
See other articles on dividing assets in divorce.