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How equitable division approaches treat assets that people can’t divide

On Behalf of | Sep 27, 2023 | Property Division

One of the big concerns during divorce involves how spouses will share their marital resources. Certain assets could easily get split with few complications. A checking account, for example, has a set financial value that the spouses can divide evenly or proportionally to their contributions to the family finances. Spouses may split up household furnishings by accounting for their value item by item. One spouse keeps the sofa and loveseat, while the other keeps the dining room set.

Other assets can be a much bigger challenge for people to divide. It may not be possible to actually split an asset itself, and there may even be questions about what major assets are worth. There may not be any other marital property of comparable value to use to offset certain assets. If divorce matters go to court (because spouses cannot work out their differences without judicial intervention), judges use equitable distribution rules to divide marital property and assign responsibility for marital debts. What does equitable distribution mean for assets that people cannot split?

Their values influence the outcome

There are certain types of assets that represent a real challenge for people preparing for divorce. It can be difficult to accurately put a price on a small business, for example. Even real property, such as the marital home, can be difficult to value because of constant market fluctuations.

The equitable distribution process will require that the courts look not just at who retains the assets that couples obtained while married but also at what they are worth. The marital home or a small business can have a set value that the courts can consider when deciding how to handle other property and any mutual debt. There is a fair way to handle splitting the value in particularly large assets. Although only one spouse can own the house after divorce in most cases, the spouse not living there should receive some of its equity or other marital assets to offset their interest in the property.

Both judges overseeing family law litigation and couples negotiating before divorce can be as creative as they desire when addressing large assets that couples cannot directly split. It is possible in some cases to sell assets and share the proceeds or to arrange to have one spouse keep certain assets while the other receives different property from the marital estate.

Understanding that property division is not a winner-take-all process but rather one focused on fairness may help people prepare for negotiations or court hearings during divorce. Seeking legal guidance can help spouses to benefit from a personalized approach to property division strategy.