Marital Assets and How to Separate Them
Dividing assets during a separation or divorce can be one of the most stressful parts of the process. Fortunately, mediation offers a more collaborative and less combative way to sort things out.
If you’re considering mediation or are already in the process, here is what you need to know about separating assets.
What is mediation?
Mediation is a voluntary process where a neutral third party helps both individuals reach agreements on issues like property division, custody and support. Unlike a judge, the mediator does not make decisions but facilitates constructive conversation to help both parties find common ground.
Why use mediation for asset division?
Depending on the state you live in, marital property is either divided equitably or is separated 50/50. However, mediation can allow parties to negotiate the division of each asset in with terms that work best for them.
You have more control in mediation. You and your ex decide how things are divided, not the court.
The overall price of mediation is often less costly than a reoccurring fee presented by your separate attorneys. Nexus Mediation refers you to a potential third party financial neutral who can help you and your spouse understand what your assets are and recommend the best way to divide them.
Mediation is faster. It can take weeks to come to an agreement with your ex instead of months or years like it would if you went through the court and litigation.
What counts as an asset?
Marital home
Vehicles
Bank accounts
Retirement accounts (401(k), IRAs, etc.)
Investments and stocks
Personal property (furniture, electronics, jewelry)
Debt (yes, even debt gets divided)
Keys to separating assets in mediation
List everything
Start by creating a full inventory of all assets and debts. Transparentcy is cruicial. Hidden assets or incomplete information will only delay the process and create mistrust between you and your ex, making mediation less effective.
Categorize Marital vs Separate property
Generally, anything acquired during the marriage is considered marital property, even if it’s in one person’s name. Property owned before the marriage or received as a gift/inheritance may be considered separate, but this can vary by state.
Assign Values
Get clear on the value of everything that you are separating. This may involve appraisals for your home, valuables, businesses etc. At Nexus Mediation, we refer an expert financial neutral to assist you and your spouse with finding the values for complex assets.
Discuss and Negotiate
With all of the facts laid out, you and your ex, with your mediator’s help, can start discussing how to divide everything. Not everything will be split 50/50. Where both parties can find value, your mediator helps you consider the effort that each person put into growing the asset. (Fairness is priority. That includes considering indirect contributions made to achieve various assets.)
Putting it in writing
Once you agree in asset division, the mediator will help draft a Memorandum of Understanding or a Settlement Agreement, which must be reviewed by an attorney and submitted to the court as part of your divorce.
Tips for a Smoother Process
Be prepared! Financial transparency is important when you are coming into mediation. If you and your ex want mediation to work, you both have to be honest about your finances.
Stay open. Compromise is key. Deciding what really matters to you ahead of your mediation session will help you move through the session faster instead of going back and forth unnecessarily.
Think long term. Focus on future stability and not on short term wins. If you and your ex are struggling to communicate prior to your sessions, working with a mediator can keep you both on track and keep you focused on your goals throughout your separation.
Third party financial neutrals are sometimes a requirement. If you and your ex have complex financials, expect that you will need to work with a financial expert. These professionals specialize in reviewing both of your finances and will assist you in the process of fairly separating assets by reviewing your financial history and help you create a manageable plan that will go into your agreement.
Final thoughts
Mediation gives you a chance to create your own outcomes with dignity, clarity and mutual respect. Dividing assets can feel overwhelming, but with the right mindset and support, it’s entirely manageable.
If you are interested in moving forward with mediation email Info@nexusmediation.net or schedule your FREE consultation here.