What's the first step in dividing property in a divorce?

Transcript:

The first step in dividing property in the divorce relates to the appropriate identification of assets and liabilities, and that amounts to really just recreating a marital balance sheet of what do the parties own, what do they owe, and who is likely to be awarded that property. In some cases that’s easily identifiable. For example, a retirement account can have a recent retirement account statement to verify a balance. In other cases, some more detailed research needs to be done. For example, if someone owns a closely held business, the process of doing a business valuation would be undertaken to figure out that key piece of the puzzle. Real estate, for example, can sometimes be difficult to appraise and value. Otherwise, where those are easily identified assets, they appear on a balance sheet and the task is then to create a just and equitable division of that property. Most of the time, just and equitable means an equal division, but there are those cases where some other result seems more fair to the parties. 

It’s also important to note that before marital property is divided, non-marital property must be excluded. So non-marital property would include anything that was owned before the marriage and that was received as a gift or as an inheritance. That comes off the table and is not subject to division, generally, between the parties. You can imagine the task if someone comes into a marriage after 30 or 40 years having owned something prior to the marriage, the type of conundrum that is oftentimes faced with trying to recreate the financial records to be able to determine the value of that property today. Similarly, with inheritances or gifts, if there’s comingling of those assets with other marital assets – things become intertwined and indistinguishable one from the other – that can present a challenge as well.