13 May 9 Types of Overlooked Assets in Washington State Divorce
Navigating divorce itself is a daunting task, but so is redefining your financial strategy and splitting your assets. With a lot going on in the divorce and its complex nature, it’s possible that you could forget or overlook an asset. It’s common for couples to focus on tangible assets, such as vehicles, instead of thinking of the more hidden assets, like digital currency.
Ensure a fair and equitable division of assets during your divorce by knowing what types of overlooked assets are common in Washington state divorces. With our help, you will learn to focus not only on tangible assets but also on those hidden ones no one ever thinks of!
Real Estate
The family home holds a sentimental value that often overshadows its financial worth. It’s not uncommon for divorcing couples to fasten their emotional anchor to this tangible asset. However, overlooking investment properties, vacation homes, or timeshares can lead to significant financial loss.
The community property laws in Washington State dictate that the parties involved must equally divide all assets acquired during the marriage, including real estate. This division can be complex, particularly regarding co-owned properties where one party may wish to retain ownership. Utilizing a buyout of the other’s interest or trading assets of equivalent value may be options to explore.
Intellectual Property
Intellectual property (IP) has a distinctive place among marital assets. Patents, trademarks, copyrights, and trade secrets often escape the spotlight yet possess remarkable value. Both parties must consider these IP rights and properly divide them during the divorce settlement negotiations.
Understanding an idea’s worth is instrumental, yet its valuation can be challenging. Determining the value of copyrights often hinges on past, present, and future income derived. A thorough valuation of a patent’s potential profits is necessary. How the parties’ legal representatives weave these IPs into the divorce decree can impact everyone’s financial fortune.
Deferred Compensation
The financial future seems secured through pensions, annuities, and social security benefits. However, an alarming oversight lies in deferred compensation plans, particularly those involving stocks or options for future services. These assets are subject to equitable distribution, just like any other community property.
Navigating the division of these plans requires a nuanced approach that considers the marriage’s duration, the employee’s service duration, and the anticipated value of the rights allocated post-divorce. It demands a clear understanding of the options—from lump sum distributions to qualified domestic relations orders that divide benefits.
Retirement Accounts
Retirement accounts, such as 401(k)s, IRAs, and pensions, often comprise a substantial portion of a couple’s assets. Yet, their complex nature can result in division complexities that affect everyone’s financial stability post-divorce.
Distinguishing between contributions made before and during the marriage is crucial. Such distinctions often dictate the proportion of the assets the court considers marital property and, therefore, subject to division. Furthermore, tax implications can significantly affect the actual monetary values received after distribution.
Digital Currency
Wealth takes on a new form in the digital age with cryptocurrencies and virtual assets like Bitcoin, Ethereum, or even digital domain names. These assets are not only obscure but also potentially unmonitored in the context of marital wealth. However, these digital troves are subject to equitable distribution in Washington state just like any other assets.
Valuing digital currency requires a specialized understanding and approach due to its volatility. A forensic accountant may be a valuable ally in accurately representing these assets during the settlement proceedings. Additionally, ensuring the parties share these assets fairly is crucial, given the anonymity often associated with them.
Credit Card Rewards and More
We live in an era of loyalty points, cashback rewards, and travel benefits. What may seem trivial, like a hefty credit card rewards balance, can hold more potential than expected. The court considers these benefits community property when accrued during the marriage, so the parties must divide them equitably.
Ensuring no reward goes unclaimed is imperative. Engage financial advisors who can provide insights into the most equitable divisions of these perks—be they relinquishments, buyouts, or other perks—considering their potential value.
Investments and Portfolios
The current market valuation often distributes stocks, bonds, mutual funds, and other investment vehicles during a divorce. However, it’s the less obvious investments, such as life insurance policies or education savings accounts, that some parties can easily miss.
Don’t underestimate the value of life insurance policies in the divorce settlement. Additionally, 529 plans and Coverdell ESAs, designed for children’s education, require careful consideration to ensure fair distribution and protection of the initial contribution amount.
Business Interests
Businesses can literally and figuratively be the fruit of marital labor for entrepreneurial individuals or those with stakes in partnerships. These assets demand visibility, whether it’s a small business or part ownership in a larger corporation. The components of the business that you must address can range from physical assets to revenue flow.
Professional valuation of the business assists in determining a fair distribution of its worth and can involve complex negotiations. Settlements may include a buyout by one spouse, continued partnership in the business, or selling shares to an external party to fund a settlement.
Professional Degrees
The increased earning potential associated with advanced degrees or professional licenses is one asset many often overlook. You must consider the significant financial benefit of these educational pursuits, whether it’s a medical doctorate, a law degree, or a real estate license.
You can include collaborative forecasts of potential earnings and seeking possible compensation for obligations incurred during the acquisition of the degree in the divorce settlement in certain circumstances. These forecasts and possible compensation can vary dramatically in cases of long-term marriages or in support of a spouse who significantly contributed to the other’s educational pursuits.
It might seem like a lot to remember and keep track of when you consider the types of overlooked assets common in Washington state divorces. Spousal maintenance attorneys from LaCoste Family Law understand various types of tangible and intangible assets, and it’s our mission to help you claim what is rightfully yours.
Reach out to us today, and our legal team can guide you toward a more secure financial future. Let’s work together to ensure that no asset remains hidden and no stone unturned. Take the next step toward safeguarding your wealth and well-being.
