You and your spouse have decided it is best for your family to divorce. However, you are unsure about how your assets and liabilities will be divided. There is no right or wrong way to divide assets and liabilities if you and your spouse can agree and can live with the outcome of that division. Florida has specific rules regarding how to divide assets and liabilities in the event of a divorce, which are grounded in the concept of equitable division or distribution of assets and liabilities.
The first step you should take is to create a list of assets and liabilities. Include all assets and liabilities that are in your name individually, your spouse’s name individually, and what is titled jointly. If you have assets in your children’s names such as college accounts or UTMA accounts, include those on the list, as you and your spouse will need to determine what happens to those assets in the event that they are unused by your children. This list should include all bank and financial accounts, all retirement accounts, all perks such as deferred compensation or stock or options plans, real property, all debt such as mortgages and home equity lines on property, all personal property worth over $2,000.00, art, collectibles, furniture and furnishings, vessels, vehicles, businesses including liabilities and loans, an estimate of the value of the business, and any other tangible or intangible or contingent asset or liability you are aware of. A contingent asset or liability is something that may come to you in the future. For example, if you are being sued, you may have a contingent liability that is the value of your exposure based upon the lawsuit.
Once you and your spouse have made a complete list of your assets and liabilities, you need to think about how you want to divide them. For some families, splitting them down the middle is the best course of action. For others, one spouse may want to retain the home and owe the other spouse their share of the value of the home by paying it out of other assets such as savings. Generally, one spouse should not give up retirement assets to keep a home. The spouse retaining the home will be “behind” in saving for retirement, and generally, for most families, the cost of maintaining the home will prevent any savings from happening in the future. Selling the home may be the smartest way for each spouse to purchase a new residence that will cost less to maintain and fit within the post-divorce budget.
If you have retained an attorney, you should speak to her about how those assets should be divided between you and your spouse. What you might want to do may not be permissible under Florida law or in accordance with the plan of the asset, or may create a taxable event you want to avoid. There are many creative ways to split the marital assets and liabilities to satisfy both you and your spouse and to provide for your children. What is good for you may be different from what is good for your best friend. Be open to what works for your family and encourage your attorney to come up with creative solutions.
