The thing that people tell us they hate the most about divorce is the financials. They hate how expensive divorce is, to begin with. They hate having to pay an attorney to represent them. But mostly, they hate having to lay all of their finances out in the open for everyone to examine. Sometimes we don’t like seeing what our financial status actually is. We may have more debt than we would like, we may not be making enough money, or we may just not know what the finances are at all. That can be a little bit embarrassing to admit, that you haven’t paid attention to that kind of thing in the past.
The Marital Balance Sheet
There are ways to make the process of dealing with the finances in divorce a lot easier. We start out by doing a marital balance sheet. Basically, what that is is a spreadsheet that has all of the assets, all of the debts, everything that there is financially in the marriage all laid out in one place. We’ll go through and we’ll ask you, “Are there retirement accounts? Are there bank accounts, both savings and checking? Are there stocks? Are there any properties, real estate, both that you might live in or other properties, the vacation place or a piece of land somewhere?”
We’re going to ask if there are vehicles. We’re going to ask, if there are any children in the marriage, if they have bank accounts. We’ll ask if you have whole life insurance. All of those are assets that we would want to know, even if they are your spouse’s. We’re going to ask both your and your spouse’s information so that we can have it all in one place. We’re going to do the same thing for the debts too. We’re going to ask, “Are there any medical debt? Are there credit cards? Is there a mortgage? Are there car payments? Do you owe your parents money for the down payment on your house?” All of those things need to go on your marital balance sheet.
Marital Versus Separate Property
Then we will look at what is marital and we’ll look at what is separate property. Marital property is anything that was accrued during the marriage. It doesn’t matter if it’s titled in your name or if it’s entitled in your spouse’s name. Anything that was accrued during the marriage is marital, except if it was something like an inheritance, a gift, or a settlement that you had from an injury or that kind of thing. Those might be considered the separate property of one party or the other. We note all of that on the marital balance sheet.
Once we have a good look at everything, we’re going to think about what a judge might do in your situation. In Georgia, judges are looking at what would be equitable. What would be an equitable division of marital assets and debts? That doesn’t mean 50/50. Not necessarily. It doesn’t mean that the person who makes more money gets more money or the person who makes less money gets more money. It means what would be equitable in this particular situation.
I like to think of a vehicle. If you have a nice car, a judge isn’t going to say, “Okay, 50/50. We’re going to cut the car in half and you get 50% and you get 50%.” A judge might say, “Okay, you get your car. We’re going to find assets somewhere else to offset any cost differential.” Or the judge might say, “The only asset there is are cars. It doesn’t matter if one’s more expensive than the other. You get your car. We’re just going to be done with it.”
Same with things like retirement accounts. A judge may say, “This person was a higher wage earner. They earned more in retirement, but they’re also going to have a better likelihood of earning more before they retire. Whereas this other person, they might have a good job, but they haven’t saved as much for retirement, and they might not be able to earn as much for their retirement.” The judge may award the person with less ability to earn retirement in the future, might award them more of the retirement accounts even if they were titled in the other person’s name. It can be complicated.
When You Might Need An Attorney
There’s a lot of situations where something might be marital, it might be half marital, half separate property. There are lots of issues. If you are concerned about this, if your finances are a little bit weird, if you have businesses that might need to be divided, these are all really good reasons to talk to an attorney. They’re really good reasons to think in advance even of your divorce, about what these kinds of assets and debts are, and start pulling together documents like bank and credit card statements. We look at the mortgage statements. We look at the actual mortgage documents. Sometimes we’ll want plan statements. If you have a retirement plan, what does that actually look like? What’s vested? What’s not vested? If you have your insurance information? We want to see all of that so that we can make sure we’re getting an accurate accounting of what all of the assets and debts are so that we can reasonably divide those for you.
Our hope is that if we can see it all on paper, if we can agree to what all of the assets and debts are, then settlement is a lot easier. We can deal with that at mediation, or in a settlement agreement, or go to court and have it all laid out nicely for the judge to be able to see exactly what there is, so that the judge just needs to go through and tick down each of the properties. The argument is more about what is equitable, rather than what the properties are.