How to Divide Assets During Divorce: Practical Steps for a Fair Settlement
Donna S. Cates, CDFA? CRPC?
Women's Wealth Builder ~ Financial Strategist/Investment Advisor ~ Certified Divorce Financial Analyst ~ Divorce Mediator ~ Public Speaker ~ Best Selling Author
Dividing assets during a divorce can be one of the most challenging parts of the process. Beyond the emotional strain, there’s the complexity of understanding what’s fair, what’s equitable, and how to protect your financial future. Whether it’s deciding what to do with the family home, splitting retirement accounts, or addressing business interests, navigating these decisions requires care, strategy, and a clear plan.
Here’s how you can approach dividing assets during a divorce:
Start with a Full Financial Inventory Before any decisions are made, you need to have a complete picture of what you own and owe. This includes:
Pro Tip: Create a detailed list with current values. If needed, work with professionals like appraisers or financial analysts to ensure accurate valuations.
Understand the Family Home’s Financial Impact For many couples, the family home is their largest shared asset. Deciding whether to keep, sell, or split the home is more than an emotional decision—it’s a financial one.
Ask yourself:
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Don’t Overlook Retirement Accounts Retirement savings can be one of the most significant marital assets. To divide these accounts without triggering penalties or taxes, you’ll likely need a Qualified Domestic Relations Order (QDRO).
Remember: The after-tax value of these accounts matters just as much as the balance on paper. A Certified Divorce Financial Analyst (CDFA?) can help you understand the tax implications.
Valuing a Business or Stock Options If you or your spouse own a business or have stock options, these assets must be carefully evaluated. Business valuations consider factors like revenue, debts, and market potential, while stock options often require nuanced calculations based on their vesting schedule and future potential.
Think Beyond Equal Splits Dividing assets isn’t just about splitting everything 50/50. It’s about aligning the division with your goals. For example, one party might keep the home while the other retains more liquid assets.
Dividing assets during a divorce is a critical step that will shape your financial future. The decisions you make now will have lasting consequences, so it’s essential to approach them with clarity and support.
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1 个月Great article Donna, especially the last point you talked about. It isn’t just about splitting everything 50/50, but rather to evaluate your goals and take what will help you further down the line.