Divorce is a difficult process for almost everyone. That’s why being clear and organized can help facilitate the process. This brief article discusses how the first step is generally to compile a marital balance sheet and what is involved.
Ownership or names on the titles should be noted on the asset listing. Typical assets include:
the money in savings and checking accounts,
vehicles and equipment,
principal residences, vacation homes and other real property,,401(k) accounts, IRAs, pensions and other retirement savings,
marketable securities, and
jewelry, artwork, furniture and other personal assets.
If either of the couple (or both) own private business interests, those will be reflected as well. Deferred compensation arrangements and other employment related awards should also be noted.
Examples of liabilities include:
credit card debt,
home mortgages and lines of credit,
vehicle loans, and
retirement account loans.
The person(s) liable for the debt should also be noted.
Whether the couple’s individual assets and liabilities are includable in the marital estate is generally a matter of law, which varies by state.
Values must be assigned to the assets and liabilities cataloged. The value of bank accounts, retirement accounts and debts can be taken from the latest account statement. But other items, such as real estate, collectibles and private business interests, may require an independent outside appraisal.
If the parties own an interest in a closely held business, selling usually isn’t an option. Instead, a business valuation expert should be used to determine its “fair value.” Any value not attributable to net tangible assets and identifiable intangible assets is considered “goodwill.” The treatment of goodwill in divorce varies from state to state. Ultimately, it’s critical to have a qualified financial expert determine what should and shouldn’t be includable in a marital estate based on the specific facts and circumstances. Our firm has a division of individuals experienced in this area. Contact our office with further information.
The HoganTaylor Tax Practice
If you have any questions about the content of this publication, or if you would like more information about HoganTaylor's Tax practice, please email Tony Otto, Tax Practice Lead, at email@example.com. You may also contact Denise Felber, Tax Partner, at firstname.lastname@example.org
INFORMATIONAL PURPOSE ONLY. This content is for informational purposes only. This content does not constitute professional advice and should not be relied upon by you or any third party, including to operate or promote your business, secure financing or capital in any form, obtain any regulatory or governmental approvals, or otherwise be used in connection with procuring services or other benefits from any entity. Before making any decision or taking any action, you should consult with professional advisors.