During an amicable divorce process, you will likely have the opportunity to create an asset division plan.
While Ohio follows the Equitable Distribution Model, meaning the goal of its courts is a fair and equitable divorce outcome, it is not a “50/50” state. This means that assets won’t necessarily be “split down the middle.” Let’s review some examples that may warrant a deviation from the boiler plate “we each get half” approach.
Remember, a marriage creates a financial partnership, and as a result, each partner is expected to spend and invest money in a way that benefits the well being of this partnership. Actions like hiding money from a spouse, exorbitant gambling, or selling off assets for much less than they’re worth can all qualify as financial misconduct. Intentionally damaging real estate, emptying a 401k, or withdrawing large sums of money are other examples.
When financial misconduct is proven, it can result in the innocent party being favored in a courtroom decision.
Unless a property was inherited by or explicitly gifted to a certain spouse, all property obtained during the marriage is owned equally by both parties. Since it doesn’t make sense to evenly split a property, one spouse may receive more in the initial divorce, but pay back the other party over time, resulting in an eventual equal division of assets.
If there is any significant amount of funds tied up in the stock market or real estate for example, a large, single “lump sum” transfer may incur fewer taxes than smaller transfers. The savings here could be used to offset any alimony payments.
Best practice is to connect with a financial expert to develop a strategy for who receives which lump sums or investment payouts.
Salary and Income Considerations
It is common for there to be a clear “breadwinner” in a divorce. However, this is often only made possible by the contributions of the other spouse. For example, one spouse staying home or working part time so he or she can take care of the kids allows the other to focus on a full time career. In this scenario, the spouse who has stayed home may need to transition into a full time role. Furthermore, there will be an entire new set of bills to pay every month. It wouldn’t make sense to designate illiquid assets (houses, cars, collectibles, etc.) to the spouse who is trying to figure out how they’ll meet their new cost of living requirements in short order.
It may make more sense for these assets to be awarded to the spouse who is already capable of paying the bills next month, and instead allot the liquid assets (cash and bonds for example) to the one who needs it most.
Where to Start?
Be sure to consult a mediation expert before agreeing to any proposals. Alternative Divorce Solutions is positioned to help you create the best asset division plan for your divorce. We know there’s no “one-size-fits-all” solution, so we take the time to learn about your situation before offering up a tailored plan.