“Can I get more than half the assets?”
That was the third question Jamie asked me in her divorce consultation. The first two were “how long will this take?” and “how much will it cost?”
I’m sure there are good reasons why you may feel you deserve to walk away with more than 50% of the assets when you’re dissolving your marriage.
Maybe you contributed more money to the family during your time together. Maybe you put your career on hold to raise the kids, and now you’re faced with returning to the workforce at a level lower than where you would be. Or maybe your soon-to-be ex mistreated you, and you feel you deserve some sort of retribution.
Whatever the reason friend, I support you and want you to get exactly what you deserve – and not a drop less! I also want to make it clear, this is not about avoiding conflict or deferring to your ex.
As a preliminary matter, you should know that whether you can get more than “half” if you go to court will depend on where you live. States with community property laws - like California - require a 50/50 division (with certain caveats). In most states, though, equitable distribution laws let the court make a “fair” though not necessarily equal division.
[By the way, no matter which state you live in, most judges will honor an agreement that you and your spouse reach together. Yes, even if it might not be something they would or could have done in court. If you can get your spouse to agree to your terms in a way that is relatively quick and “painless”, I say – good going! You don’t need to read the rest of this article. 😊]
But how can you reach a settlement that gives you more than 50% of the assets when your spouse doesn’t readily agree?
“All I want is what I have coming to me. All I want is my fair share.” So writes Sally Brown to Santa Claus in A Charlie Brown Christmas. Let me start by urging you to consider: should getting more than half be your goal?
Here are some key things to think about:
1. Choose your priorities.
In most instances, agreeing to 50/50 would probably be much easier than convincing your spouse to let you have more. Right?
Have you heard the old saying, “cheap, fast, and good. Choose two.” ?
Let’s go back to Jamie’s first 2 questions (which it turned out were actually also her priorities). She really wanted to be done with her divorce quickly and inexpensively. She also wanted a sweet deal. But here’s the rub: Those three things don’t usually go together.
Look, there are exceptions to every rule. In general, though, great settlements take time, patience, and more legal dollars. If being done quickly or “cheaply” are really important or necessary to you, that might not translate into getting more than half.
To get it, you’re pretty sure it’ll cost you more legal fees, more time off work, and more aggravation. It will also take longer. Only you can decide if that’s worth it, but make sure you consider those hidden costs when you do. Cheap and fast might actually be worth more to you in the end.
2. Figure out what 100% is.
Now that you know what you want, it’s time to figure out what your estate - and each component of it - is actually worth. Because if you don’t know what 100% is, you won’t know what 50% - or more (or less) of it is.
Let’s say your estate includes a bank account, retirement, and a house. (I’m using simple numbers here. The point isn’t how much or little money you have, but that you're clear on what those numbers really are).
You see it like this: But he sees it like this:
Bank account: $10 Bank account: $10
Retirement: $200 Retirement: $200
House: $225 House: $175
Total: $435 Total: $385
You’d like to keep the house, split the cash, and would be ok with him taking all the retirement. In your view, that’s a good deal for you. The house is worth more and you’re years away from retirement. In his view, he’s actually getting more of the assets.
Which one of you is correct depends on the actual value of the house, whether it comes with a mortgage, and whether the retirement is tax-deferred (like a 401k) or tax-free (like a Roth).
The lesson here? Look beyond face value to understand your assets and their true value.
3. Think about the long-term “cost.”
Not all assets are created equal. Some come with significant tax consequences. Some are risky. Some require too much work. And some just aren’t as valuable as they may seem on paper.
Getting more than half might not be so appealing if it means taking assets you don’t want, can’t afford to maintain, or include a hefty tax bill down the road.
The take-away? In your quest for more, you might be better off focusing on the quality of the assets than the quantity. Get clear on what matters most to you first. Understand the real value of what you’re fighting for. Then decide your settlement strategy from there.