If asked to define the term divorce assets, you might say your house, your car, your retirement accounts, and your bank accounts - and that might be it.
But did you know there are nearly 100 other items which may be considered marital assets, and if you’ve got one (or more) odf them, they may be subject to asset division as well?
So in this post, you'll find an ultimate divorce list of assets we created to help you start thinking about the items that might be relevant in your situation.
Before we dive into our list of divorce assets, there are a few important things to keep in mind:
Even if you or your spouse own an item on the list, you will first need to determine if it’s marital property, separate property, or a combination of both marital property and separate property, before you discuss dividing it.
But there are many other items that must also be discussed and divided during a divorce. Each with its own complexities.
Take for example vacation homes.
Vacation homes can be an asset, an income stream, or both. The same can be said of income-generating properties such as farms, rental homes, and commercial real estate. What if you own a rental home, and a relative (like your parent) lives there?
The home looks like an asset on paper, but it could also be a debt if you pay all the bills.
Don’t forget other miscellaneous divorce assets such as timeshares, vacant land, and deeded parking spaces. Certainly, these aren’t “real estate” in the traditional sense, but they can have value, even if that value is difficult to determine.
Key Points About This Type of Marital Property:
Real estate can take on many different forms, with each form having its own unique complexities and paperwork required for its transfer and ownership.
This marital property typically requires more time and effort to divide in a divorce, and may even require the approval of financial institutions or governing bodies.
A fair divorce settlement takes into account not only the value of each item, but the complexities of its valuation, taxation, and potential for liquidation or income generation.
Liquid Divorce Assets:
Chances are you’ve got at least one checking account, and possibly, a savings account.
Unlike real estate, bank accounts are generally easy to liquidate.
But they can be complex to value and divide based on the timing of your paycheck and when your bills are due. For example, the balances in these accounts may be high on the day you start mediation, but look different on the day your divorce is finalized.
Other accounts such as a credit union or money market account may require the holder to be a company employee, work in a certain profession, or hold a brokerage account.
Divorce and Marital Assets That are Liquid: Key Points
When it comes to dividing assets that are liquid, timing is everything.
An equitable division takes into account their values “on paper” and balances it with any debt anticipated, or already incurred.
Don’t forget about cash as it may be in a safe, safe deposit box, under the mattress, or other hidden location.
Vehicles as Assets in Divorce:
Chances are you and/or your spouse own at least one of these marital assets, but valuing vehicles can be difficult as many factors can impact their worth including mileage, vehicle type, condition, utility, geography, and operability.
For example, with classic cars and trucks, since the resale market is quite small, and the financial investment is quite high, their value may be far lower than you think. While motorcycles, boats, RVs, campers, and airplanes may be assigned to one spouse “by default,” creating an imbalance in property division.
Finally, some vehicles can only be used in specific circumstances like high-end bikes, jet skis, or snowmobiles.
Vehicles Divorce Assets: Key Points
While you may not give them a second thought in your day-to-day life, the value assigned to vehicles in a divorce can greatly impact your bottom line.
Given depreciation, maintenance costs, and the limited resale market, a vehicle’s value may be far lower than what Kelly Blue Book or NADA Guides say.
If the vehicle requires special licensure or skills to own and operate, it can create an unintended asset imbalance for the recipient.
Traditional Non-Retirement Investments:
With the widespread popularity of brokerage sites like E*TRADE and direct mutual fund providers like Vanguard, more people own non-retirement investments than ever before.
But hidden behind those easy-to-use apps, websites, financial documents and colorful quarterly reports, are a whole host of complications such as cost-basis, capital gains, tax losses, and volatility, which can make dividing these divorce assets difficult (and costly) if you’re not careful!
Not all investments are created equal – even if their values look the same on paper. So what may look like an equitable division at the time of your divorce, may turn out to be anything but.
Employer Awarded Non-Retirement Investments:
RSU’s and options can be rewarding to own, but their discussion and property division is far from simple.
Questions regarding value, transfer, and taxation must be resolved at the time of your divorce – even if the shares or options have yet to vest.
You also need to decide (and agree) if the RSU and options are a reward for a job well done or an enticement to stick around. And also what will happen if the "employee" spouse leaves the company before the shares or options vest.
Non-Traditional Non-Retirement Investments:
Each of these forms of investing is unique in its own right, but these divorce assets have one thing in common – they aren’t for amateurs.
Some are subject to forces outside your control such as political instability, monetary policy, or extreme weather. While others can be a black box, as they aren’t publicly traded, or require serious cash to invest in.
If a majority of your holdings are contained in one or more of these investment vehicles, significant complexities can arise during your divorce.
Life Insurance Policies:
Term life insurance is not considered a divorce asset as it has no value unless the policyholder passes away, however, whole life insurance can contain a “cash value” that can be withdrawn by the policyholder.
But liquidating a whole life policy can require surrender fees and require you to terminate the policy if you tap into it, so doing so may not be ideal.
Investments for Others:
While most assets in a divorce are for the benefit of the parties involved, sometimes an asset can be for the benefit of someone else.
Such is the case with 529 plans and/or UGTM accounts which benefit your children.
Now you may argue these aren’t divorce assets at all since they can’t be liquidated for your own personal use. But if you live in a state where paying for college can be required of divorced parents (like New Jersey and Illinois), and you get to keep the 529 plans, you reduce your future tuition liability.
Which is a valuable thing to have.
Non-Retirement Divorce Assets: Key Points
The list of complexities involving non-retirement assets is long, and those complexities are extremely difficult to navigate!
Issues of taxation, market forces, world politics and economies, risk tolerance, comfort level, transferability, and a whole host of other factors make these types of divorce assets the most difficult to untangle.
Consulting with a qualified financial professional or working with a divorce mediator with a background in finance can go a long way towards educating you and your spouse on these matters and aid you in the creation of a fair and equitable settlement.
Despite the rise in streaming services, many people still own digital content such as large .mp3 music collections, or movie downloads.
Since only one person in the marriage can retain possession of the original, these digital files can be worth quite a bit as the cost to replace them may be significant.
Travel & Leisure Digital Assets:
If you or your spouse engage in significant travel or dine out frequently, chances are you’ve amassed significant loyalty/reward points during your marriage.
But can they be transferred?
If so, is there a cost to transfer them?
Will doing so mean neither spouse has enough points to redeem for a free anything? And if the points were earned as a result of business travel, is the “employee” spouse required to use them for business purposes?
All things to determine when it comes to divorce and travel and leisure digital assets.
World Wide Web Digital Assets:
If you or your spouse registered a great domain name or started a website, blog, or Instagram account with marital funds and amassed subscribers or followers that could be turned into a passive income stream, you need to determine if these should be considered divorce assets.
Intellectual Property Digital Assets:
For inventors and creators, the idea is the property and sometimes those ideas can turn a hefty profit.
And if you hold a patent that can later be monetized, or you’re already receiving royalties from something you created and licensed, these can be what are considered assets in a divorce, income streams, or both.
Artwork Digital Assets:
When you think about an asset, it’s common to consider those that are either tangible, such as a car or house, or at a minimum, have a monetary value such as a stock or bond.
But just because digital photographs don’t fall into either of these categories doesn’t mean they have no value as divorce assets.
Because they can have sentimental value.
On the other hand, NFTs are works of digital content that can be bought or sold using cryptocurrency.
Given the marketplace is new, and ownership is limited to a single, unique individual, it may be difficult to value and exchange them during a divorce. But they do need to be counted as divorce assets if either spouse holds one.
Key Points About Divorce and Digital Assets:
Due to their abstract nature, digital assets in a divorce are often overlooked.
The replacement cost of digital assets can often far exceed their market or resale value.
Valuing these items may prove difficult as their worth may be in the eye of the beholder.
Retirement Investments as Divorce Assets:
Qualified Defined Contribution Plans:
Other than a marital home, retirement plans may be the most valuable divorce assets owned.
But unless you’re 59 ½, or choose to take an early withdrawal and incur penalties and taxes, this type of account won’t be liquid at the time of your divorce.
And since a qualified defined contribution plan is titled to one individual, its value fluctuates constantly, and special paperwork must be prepared and signed off by a judge to divide one, treatment as a divorce asset must be carefully handled and executed.
Qualified Defined Benefit Plans:
Since a pension is a promise to pay someone retirement benefits in the future, but you’re getting divorced now, how do you value, and divide one?
And how does the non-pensioner guarantee their share will be there when they retire?
Given that corporate, government, and military pensions are all treated differently, some require mandatory contributions, and special paperwork (such as a qdro) is needed to ensure their availability and division, a pension is one of the most complex divorce assets in existence.
Individual Retirement Account:
While IRAs and 401(k)s appear similar in that they’re tax-deferred retirement accounts, IRAs require different paperwork to be divided in a divorce, their tax treatment may be different than that of a 401(k), and they can contain non-traditional investments, so their risk profile may be significantly greater.
Insurance-Based Retirement Investments:
Annuities allow you to invest a lump sum now, for a future stream of payments during your lifetime.
But since payments may not have started, and you don’t know how long they’ll last, valuing an annuity as an asset in divorce is extremely difficult.
Retirement Investment Assets: Key Points
The valuation and division of retirement accounts in divorce cases requires special know-how, paperwork, and permissions.
No actions should be taken to value and/or divide these types of divorce assets before your divorce negotiations.
Doing so may result in inaccurate values, and unnecessary penalties, taxes, and fees.
Personal Property Divorce List of Assets:
When it comes to valuing household items as divorce assets, it’s less about what they’re worth and more about what they cost to replace.
And while many divorcing couples think only of big-ticket items, don't forget about silverware, sheets, towels, and all the other “stuff” you’ll need to establish separate households.
Clothing and Jewelry:
When it comes to clothing and jewelry in a divorce, these items are usually not considered divorce assets - especially if the item in question was given or received as a gift.
But if you and/or your spouse decide you no longer want for example, your wedding jewelry, or a designer handbag one of you gave the other, you could choose to sell it and divide the proceeds.
But it does happen from time to time, so that’s why it made the list.
You might not think of yourself as a collector, but even a few guitars or bottles of fine wine can be worth something.
And if it is a true collection, you'll want to have it appraised by a professional as collections can have significant value.
Just like digital versions, personal entertainment items such as LPs, CDs, or DVDs can have value as a divorce asset because you are avoiding a replacement cost.
Personal Property Assets in a Divorce: Key Points
When it comes to personal items in a divorce, a little can add up to a lot.
Don’t forget to factor in replacement costs or personal property as the cost to do so can be worth more than the item itself.
When in doubt, trust a professional to appraise and value your items. Otherwise, you may sell yourself short.
Business Ownership and Business Assets in Divorce:
So whether you or your spouse is a business owner, or own shares in someone else's company, the issues surrounding and list of business assets in divorce that need to be discussed and resolved is significant.
Business Assets Divorce: Key Points
A valuation prepared by an outside expert is critical in a business-owner divorce, and their values can vary wildly depending on the valuation method used.
Businesses can be assets, income streams, or both.
The value of a business may differ significantly from what an owner can receive from an interested third party on the open market.
Everything Else That May be Considered a Divorce Asset:
As the name implies, this section covers anything and everything we’ve encountered in our years of practice, that we couldn’t quite find a place for in our other categories.
S-Corp, Limited Liability Company, Limited Liability Partnership, or C-Corp
Ownership Shares or Investment in a Startup
Season Tickets and Personal Seat Licenses
Tax Losses On Investments Or Prior Year Carryovers
Credit Card Cashback Rewards
Country Club Or Golf Club Memberships
While we’ve done our best to come up with as many divorce assets as we have either encountered or could think of, there are probably others in addition to these.
But hopefully you found this post useful as a starting point to create your own list of marital assets and non marital assets. And don't forget marital debt because that also needs to be discussed and divided!
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