The Do’s and Don’ts of Building Your List of Assets
Don’t start negotiating in your divorce without first building a comprehensive list of the assets.
Every divorce includes making decisions about dividing up the assets. Before you start negotiating with your spouse about who will get what, take some time to build a comprehensive list of all the assets owned by either you or your spouse. Once you feel confident that your list includes everything, and that you have an accurate value for each item, you can begin to think about who will keep what. As you begin to build your list, keep in mind the following do’s and don’ts.
Don’t confuse the concept of “title” with the concept of “community property.” Title is a legal term that refers to the ownership of something. As you build your list, you will want to include any assets where you and/or your spouse are on the title. An example of title is the name listed as owner of a bank account. Another example is the name listed as owner of a vehicle with Washington State Licensing. Be sure to include items where you or your spouse are only part owners, such as property that may be co-owned with a family member.
You may have heard that Washington state is a community property state, where assets owned by a married couple can be characterized as community property, separate property, or sometimes a mixture of both. How an asset is titled and whether the asset is community property are two separate things.
Do start by writing down the “easy” assets. Start your list by writing down all the things you can think of off the top of your head. Here are some ideas to get you started:
Real estate (primary residence, second home, and rental properties)
Bank accounts (checking, savings, CDs, and money markets)
Brokerage accounts
Retirement accounts (401(k)s, 403(b)s, IRAs, and Roth IRAs)
Pension plans (FERS, PERS, TRS, and SERS)
Stock options (ISOs and NSOs) and restricted stock units (RSUs)
Vehicles and boats
Businesses
Life insurance policies
Health or childcare savings accounts (HSAs, FSAs, and HRAs)
Do review old tax returns. Federal income tax returns are a great place to look for information about assets. Start by printing a copy of each tax return for the last five years. Then, review each line by line. You don’t need to have any specialized knowledge about taxes to do this – simply go slow and read the words on the pages. You will be amazed when key words jump out to you.
The following assets may be reported on an income tax return if there was activity during the year:
Rental properties
Bank accounts
Brokerage accounts
Retirement accounts
Pension plans
Businesses
Health Savings Accounts
Cryptocurrency
Do make a list of children’s assets. Many parents have accounts for their kids. These include checking and savings accounts, GET plans, and 529 plans. Depending on the type of account and the age of your child, the account may be titled in the name of one or both parents or the child.
You will want to include these accounts on your list. Usually, accounts for the kids are set aside from the larger asset division. However, it’s still important to keep these accounts in mind. Having these accounts on your list might prompt helpful discussions with your spouse, such as whether the account titling will need to be updated after the divorce and rules of the road for contributing to, and taking distributions from, the account in the future.
Don’t forget to write down important information about each asset. For each item on your list, you will want to include (if applicable):
The identifying number
The value
The date that the asset was valued
How the asset is titled
For example, if there’s a checking account at BECU, get a recent statement for the account and then write down:
The account number
The account balance listed on the statement
The date of the statement
How the account is titled
Do make a plan for valuing “difficult to value” assets. It can be difficult to establish the value of certain assets, like real estate, businesses, pensions, and stock options. Unlike a bank account or a vehicle, these items may require paying for a professional valuation. If you are trying to keep costs low in your divorce, you may be wary of hiring professionals to value these items. However, having professional third-party valuations will allow everyone to proceed confidently in the divorce negotiation, knowing they have accurate and reliable information.
Contact Serene Divorce Planning for a copy of the asset list we use with clients.
This information is educational in nature and should not be relied upon for legal or tax advice. Serene Divorce Planning LLC is not an attorney and does not provide legal or tax advice. Individuals seeking legal or tax advice should solicit the counsel of competent legal or tax professionals knowledgeable about the divorce laws in their own geographical areas. Serene Divorce Planning LLC does not sell or consult on securities.