Here are some ways to divide property fairly during a divorce.
For most couples, splitting up your possessions is a big part of the process of getting divorced. Either you and your spouse sit down and decide together who gets what — or a judge will have to divide what is called your “marital property” or your “community property.” If possible, of course, it’s best to do the dividing yourselves.
The most important advice I can give you on this subject is to be open and honest in setting out everything of value you have come to own during your marriage. That includes revealing that you still have a little bank account you stuck away secretly five years ago when the two of you were thinking about splitting up. Items such as these tend to surface sooner or later, and the penalties for hiding something of value can be devastating.
Dividing Up Property Yourselves
If you and your spouse are going to try to divide your property yourselves, here are some steps to get you started.
List your belongings. Working together, make a list of all of the items that you own jointly and need to be divided. Of course, you can omit items both of you agree are personal things of insignificant value. And, for example, when dealing with furniture that is not of great value, you can just specify “furniture in master bedroom,” “dining room furniture,” and so on.
Value the property. Try to agree on the value of anything worth more than a specific agreed amount — say $100 or $500. If there is a house, a business, or anything that is difficult to value, get an opinion about that from some agreed outside authority. For example, for your house, pick a realtor who is familiar with your neighborhood. Or, for antiques, you can hire a professional appraiser. You may need an actuary to value a pension and an accountant to help you value an investment. If there is a mortgage or other debt associated with any item, be sure to subtract the amount of the debt from its value so that you list its net value.
Decide the logical owner. Now go through your main list, item by item, and decide whether there is some good reason to have each piece of property go to one or the other of you. Start with the items with the biggest value and see how far you can get. If having an equal split is important to you, keep track of the total value each person accumulates. Later, trade off on the smaller items, with each of you taking one in turn.
Get the judge’s approval. If you and your spouse can agree on dividing the property you own together, the court will normally approve whatever agreement you have reached. The only exception is when a party who doesn’t have a lawyer seems to have agreed to take a lot less than half of the property. In that case, the judge may want to ask a few questions to be sure that one of you isn’t taking advantage of the other. But don’t count on this intervention in every case
If it becomes difficult to proceed as suggested above, it may be helpful to try a few additional methods.
Coin flip I. Flip a coin and have the winner divide up all the items. Do not break up sets of things, such as dishes and tables with matching chairs. The loser of the coin flip then chooses which list he or she will take; the remaining list belongs to the listmaker.
Coin flip II. Flip a coin and have the winner place a monetary value on each item on a list of items to be divided. The other person then chooses the items he or she wants, up to one-half of the total value of all the items on the list. The person who won the flip is awarded what remains.
This method can also be used for one item at a time: The first person places a value on an item, such as the car, and the other person either takes it at that value, or it goes to the first person at that value.
Hold a sale. Hold a garage sale, then divide the proceeds equally.
Entertain bids. On items of substantial value — a house, a business, an expensive car — have each spouse submit a sealed bid; when the bids are opened, the highest bidder gets the item. For example, if you have an expensive antique and one of you bids $8,000 and the other $9,000 on it, the higher bidder gets the item at its listed value. An equalizing payment is made at the end of the process.
Auction it off. Hold a real auction with a neutral person acting as auctioneer and the two spouses being the only bidders allowed. Any increased bids should be a minimum percentage, such as 5%, over the last bid. Otherwise, the parties might be able to force the proceedings to go on into the night as they raised one another a dollar at a time.
For more commonsense tips on getting a divorce, see A Judge’s Guide to Divorce: Uncommon Advice From the Bench, by Judge Roderic Duncan (Nolo).