Equitable Distribution in Divorce: No Two Assets are the Same
February 11th, 2019
By: Mallory N. McDonald and Heather Rooney McBride
In a Missouri divorce action, marital assets are divided in what is considered to be a fair and equitable manner. In re Marriage of Collins,875 S.W.2d 643, 648 (Mo. App. S.D. 1994). When determining a fair and equitable division of marital assets, the Court considers the following factors:
(1) The economic circumstances of each spouse at the time the division of property is to become effective, including the desirability of awarding the family home or the right to live therein for reasonable periods to the spouse having custody of any children;
(2) The contribution of each spouse to the acquisition of the marital property, including the contribution of a spouse as homemaker;
(3) The value of the nonmarital property set apart to each spouse;
(4) The conduct of the parties during the marriage; and
(5) Custodial arrangements for minor children.
Mo. Rev. Stat. § 452.330 (2018).
Of these factors, there is one that may seem to be easily determined—the value of the nonmarital property set apart to each spouse. Often it is thought that this can be addressed by simply creating a list of assets and looking at the fair market value of the asset, whether it be a bank account, investment account, retirement plan, car, collectible goods, or the like. However, no two assets necessarily have the same actual “value”, even if they tend to hold the same face value when making a list. For example, a checking account with a balance of $1,000.00 and an interest rate of 0.09% and a money market account with $1,000.00 and an investment account with a yield of 7.00% do not have the same “value” even though the amount presently on deposit in the account may be the same. Of course, both of these accounts are fairly liquidatable. However, consideration should be given to the possible tax implications associated with cashing out an account as well as the possible risk associated with the account. This type of an example is why domestic attorneys may need to consult with financial professionals regarding tax consequences and asset valuation.
The division of assets is also not as simple as divvying up separate assets between the two separate individuals. Often, assets are apportioned to the parties in order to create an equitable division. For example, a spouse may receive a portion of the other spouse’s 401(k). Also, debt is often considered in the equation. For instance, if the marital home is awarded to a spouse who is going to assume all of the liability on the mortgage, the assumption of debt will likely be considered when determining the marital assets given to the other spouse who is not taking on the mortgage debt.
Asset division in a divorce proceeding can be complicated, and it is important to have an experienced attorney who can effectively communicate with and guide you through the process and who can strategically handle the assets at issue in your case. Our family law attorneys at Rooney McBride & Smith, LLC are experienced in handling complex family law matters. To consult with one of our family law attorneys, please call our office at (417) 708-9681 to schedule your free consultation.