Some assets may have to be liquidated during divorce to ensure that both spouses receive a fair and equitable split of the property. The process varies depending on state law, and it should be completed under court supervision to avoid illegally transferring an asset.
Make a List of All Assets
- Make an itemized list of all assets accumulated during your marriage.
- List any you owned before the marriage separately, as well as any inherited assets given to only one spouse. These are usually non-marital assets, and they may not have to be divided in the divorce.
- Include retirement accounts and investment plans.
It's easiest to do this together if your divorce is amicable. If you're not on speaking terms, consider enlisting the help of a mediator or attorney.
- You must agree on a value for each asset.
- Some items are simple to assign value to, or may have a low fair market value. These items typically aren't liquidated in divorce but are awarded to one spouse or the other.
- Real property should be appraised by a professional real estate appraiser.
- Items such as vehicles can be valued through online resources, such as Kelly Blue Book.
- Specialty items, such as art collections or business assets, should be appraised by a professional with specific knowledge of these items.
Be sure to subtract the balance of any debts owed against the property, such as an auto loan against a vehicle. These debts must paid off before the property can be sold.
Determine What Needs to Be Liquidated
If an asset can't be divided fairly, such as a primary residence, it may have to be sold, the proceeds divided fairly and equitably between spouses.
The Liquidation Process
- List real property with a real estate broker.
- Post ads in the newspaper or craigslist for high-valued personal property, such as vehicles and some furniture.
- Keep records of each item sold, including the sales price and where the proceeds went.
- Host a yard sale for smaller items or household goods, keeping track of sales prices and total cash received.
- Consider using an auction house for larger quantities or specialty items.
- Don't try to sell an item without your spouse's knowledge. This can result in sanctions from the court.
- Keep all sales visible and share information regularly with your spouse. This reduces the chances of dispute when property is divided in the divorce.
- Consider using a mediator or neutral third party to oversee the liquidation and ensure fairness.