1. Real Estate
For many married couples, their biggest asset (and sometimes their biggest debt) is found in their marital home. Because the “marital estate” of any divorcing couple is comprised of most assets and most debts acquired or incurred between the date of marriage and the date of separation, real estate is a very common issue in many divorces. Although this may come as a surprise for many new clients, under Pennsylvania Law, it does not necessarily matter which spouse’s name is listed on the deed to a property owned by one spouse or the other. A spouse whose name is not listed on the deed to a property may be entitled to a portion of the equity in that property acquired during the marriage.
For many couples, however, there is only one property owned, it was purchased jointly during the marriage, and the parties are paying down a joint mortgage on the property. In this scenario, the parties must seriously consider whether one of them wants to retain ownership of the house following the divorce, whether one of them will be able to afford the home without the other spouse’s income, and whether one spouse can afford to “buy” out the other’s ownership interest either in cash or in offsets from other marital assets. If one party wants to keep the home and has the financial means to do so, they still must consider whether they will be able to remove the other party from any mortgage instrument. The most common way of accomplishing this is by refinancing the mortgage in the retaining party’s name only. Perhaps the simplest way to deal with marital real estate is to list the property for sale, sell it for maximum value, and divide the proceeds as agreed by the parties or ordered by the court. As long as the property can be sold for a high enough price to satisfy all liens then the parties will have less debt to worry about and will be able to divide the equity between them.
Dividing real estate can be a complicated and crucial step in your divorce. Contact us at Sadek and Cooper to schedule your free initial consultation to discuss your options for dividing equity in your or your spouse’s real estate holdings in your divorce.
2. Retirement Savings
The second most common asset that divorcing spouses must divide between them is retirement savings. Retirement savings can be held in numerous different types of vehicles including Pensions, 401(k)s, IRA’s, Annuities, and Thrift Savings Plans. Any value accrued in a retirement savings vehicle between the date of marriage and the date of separation is considered to be marital under Pennsylvania divorce law and is divisible at the time of equitable distribution of marital property.
Some types of retirement accounts are easier to value than others, with pensions often requiring an actuary or specialist to provide a marital value. Once the parties or the court decides how a retirement account should be divided, often a Qualified Domestic Relations Order (QDRO for short) is required. The cost to have a QDRO prepared is usually around $500.00. The QDRO must be approved by the fund and then signed by the parties before it can be submitted to the Court and ultimately back to the fund for administration. Often times, the QDRO results in the non-employee spouse becoming an alternate payee who will be paid a separate payment upon the employee’s retirement. Sometimes, however, the QDRO allows the non-employee spouse to “roll over” their portion of the marital retirement account into a retirement account of their own.
Dividing retirement accounts properly and fairly is an extremely important part of many divorces. Contact us today and schedule your free initial consultation to discuss your options for division of your or your spouse’s retirement assets.
3. Cash savings or Liquid Investments
Many couples have a cash savings reserve or other relatively liquid investments. Whether you have a savings account, certificate of deposit (CD), or a brokerage fund, these assets must also be divided in your divorce. Depending on the type of asset and the proposed or agreed upon division of all other marital property, the parties may agree to split the marital portion of such assets evenly or one spouse may receive a higher percentage of the asset(s). For example, if one spouse is retaining ownership of the marital residence then the other spouse may retain a higher dollar amount in another asset as an offset for equity to which they would have been entitled to from the real estate. Liquid assets can be extremely useful for working out settlements between the parties or for allowing the parties to weather the expenses of separation or divorce. It is important to remember, however, that both parties will be held accountable if they liquidate or spend any marital liquid investment or cash.
Dividing marital assets in divorce can be the most difficult and stressful part of the divorce process. To discuss your case, contact us today to schedule your free initial consultation.