In an uncontested divorce the spouses will have to agree on the division of all marital assets for the case to be finalized. The spouses must come to a mutual agreement on all the details for the division of property and not require the intervention of the court to divide any of the assets. In addition, the parties must also agree on the details regarding alimony, spousal support, child support and child custody. Properly handled, an uncontested divorce is typically an easier process than an uncontested divorce and less financial burden.
However, it is not uncommon that in the process of obtaining an uncontested divorce certain property and assets are overlooked either because they are considered insignificant, one party conceals the asset, or because one or both of the parties do not know how or even if the asset can be divided. In most cases, the majority of property and assets obtained during the marriage can be considered marital property and can be divided by the parties or the court. Prior to a divorce, it is recommended that the parties take either a video, photographic and begin creating a written inventory of the assets that are to be divided. This will be very helpful when you first meet with an experienced divorce and family law attorney to discuss a fair division of your assets.
Commonly Overlooked Assets in an Uncontested Divorce
In an uncontested divorce, especially one that has been rushed and is complex, the parties may overlook certain assets. Below is a list of commonly overlooked assets in divorce cases:
- Timeshares: Although timeshares are often worth less than what is still owed on them, they still have some value if used by either party. Also, if the timeshare is paid for, the parties may decide to sell the timeshare. However, if the timeshare has negative equity, many parties may decide to let it be foreclosed on, short sold, or they may mutually agree to maintain it and make a decision at later time.
- Prepaid Insurance: Prepaid insurance policies should not be overlooked since all payments are made in advance and the coverage has an intrinsic value. It is recommended that the parties consider these policies to be assets to be allocated to one party or other in the divorce.
- Tax Refunds: Even if the parties are not filing taxes jointly, tax refunds received by either party are frequently considered by the court to be a marital assets subject to division. In an uncontested divorce, tax refunds should be considered a liquid asset (like cash) and an agreement should be reached as to how to divide the tax refund.
- Frequent Flyer Miles and Points: This is a commonly overlooked asset, which can also be problematic to divide. What is recommended is to use the point to issue tickets made out in the other spouses’ name or estimate the dollar value of the miles and award the other spouse the appropriate negotiated amount.
- Stock Options: Stock option are also to be taken into consideration. If the spouse has the option of purchasing an employer’s stock at a set price, they retain the option to purchase that stock at the same price sometime in the future. Sometimes stock options can be a very valuable and should not be considered in a comprehensive review of marital assets.
- Vacation, Sick and Holiday Pay: Vacation and holiday pay can also be divided in a divorce. It is recommended the parties estimate the value of the hours accumulated based on the spouses’ pay rate and divide by an agreement to be included in the Divorce Settlement Agreement. This is more of an issue for highly paid executives that may have very significant value in their accumulated paid leave.
- Photographs and Home Videos: Personal and home videos and photographs can also be a divorce asset. With modern technology photographs, films and digital media can easily be copied. But because they are also considered property, and are considered irreplaceable in most instances, we strongly recommend the parties come to an agreement in writing regarding photographs and home videos. Usually the agreement will include a provision for the parties to share and provide copies of the photographs and home videos.
- Collections: Art, coins, stamp, memorabilia, automobiles, antique furniture, firearms, and other types of collections should not be forgotten. Not all, but many collections can be very valuable and subject to equitable division in a divorce. Most collections of significant value will need an expert to appraise the value for the parties.
- Pets: Pets are not to be forgotten. Certain animals can have a great value if they are prized or are used for the purpose of breeding prized animals. However, even pets that have very little monetary value will likely have significant emotional value to one or both of the parties. Who keeps and cares for the pets after the divorce should be decided beforehand and agreed to in writing.
- Patents: Patents are typically overlooked in divorces. In addition, they are also frequently concealed by the party that has rights to the patient. However, patents are eligible to be divided if the invention / idea was developed during the marriage.
- Intellectual Property: Related to patents, possible book deals, movie deals, trade marks and other contracts may have value that should be addressed in an uncontested divorce. It is not uncommon for one party to hold back on information regarding intellectual property since its value is not always obvious or easily discoverable by others.
- Business Ventures: If one the spouses owns a business and they are expecting to continue to have a profitable venture, the goodwill from that business can also be subject to equitable distribution. Also, if the business was started and developed during the marriage, the business should be considered a marital assets subject to equitable division. However, it is important to note that not all businesses that are successful necessarily have any significant assets, net worth or value from the person that person that started and manages the business day to day.
- Movies, Music and other forms of Electronic and Digital Media: DVDs, Blu-Rays, CDs, and online ownership of entertainment should not be forgotten about. Those purchases can easily add up to thousands of dollars over time and can be very expensive to replace them after a divorce. While most people do not care about their spouses’ movies and music collection, it is not uncommon for the family’s ownership of these items to be intermingled. Therefore, we do advise the parties take the time to consider and settle the ownership of these items as a part of the divorce.
- Clothes, Jewelry and Shoes: These items can sum up to be a sizable amount if they are considered expensive and that monetary amount is subject to distribution of they were purchased during the marriage. However, jewelry is frequently the subject of much contention in many divorces. The receipt and exchange of jewelry during the marriage may be significant, and much jewelry may be purchased and kept by either or both of the spouses as investment or for personal use. As with collectibles, an expert may be needed to appraise the value of jewelry accumulated during a marriage.
- Investments, Retirement Accounts and Savings: Money and assets accumulated in the form of 401(k)’s, IRA’s or some other retirement plan can also be divided. It is not uncommon for a divorcing spouse to not know how much their spouse may have in various accounts, and overlook investigating without proper legal advice. Also, getting access to complete information regarding accounts and savings can take some time, depending on whether the other spouse is willingly to cooperate fully. However, this is a class of assets that should not be taken for granted, as it frequently one of the more significant but frequently overlooked assets in a divorce.
If The Parties Cannot Agree on the Division of Assets
After making a comprehensive list of assets and discussing them with your spouse, hopefully you will be able to come to an agreement on their division. If this is based on a disagreement on how much the assets are worth, experts can be consulted with to help determine their value. Experts that help with such matters include: CPAs, Accountants, Forensic Accountants, Business Evaluators, etc. There are financial firms that as a part of their practice work with divorce attorneys by providing the following services on behalf of their clients:
- Financial Affidavit Preparation
- Marital Balance Sheet
- Income/Expense Budget
- Income Analysis
- Alimony Analysis
- Child Support Calculation
- Equitable Division Analysis
- Asset Tracing / Hidden Assets
- Collaborative Practice
- Source of Funds Analysis
- Business Valuation
- Pension Valuation
Most parties do not need this level of analysis to settle a divorce case, but it is not uncommon for outside help to be needed to valuate a pension.
However, if you cannot reach an agreement with your spouse despite your best efforts, you still have the option of filing a contested divorce. A contested divorce is frequently filed when the divorcing parties cannot agree either about getting divorced or about the circumstances of the divorce. Typical areas of disagreement include:
- custody of children
- allocation of debts
- spousal support
- child support
- division of assets
It is very common for contested divorces to be filed solely over disputes about how investments and real property are to be divided. Typically a contested divorce can be stressful and can cause the members of the divorce party to overlook some small details and assets; which is why meeting with an attorney early in the process can be very helpful. However, with accurate information from financial experts and with the guidance of an attorney, most parties can negotiate a mutually beneficial Divorce Settlement Agreement.