Getting a divorce is emotionally stressful, especially for older individuals who are nearing retirement (called gray divorces). Because of the emotional overload associated with a divorce, it’s easy to forget about assets you own that need to be divided. Everyone remembers big assets such as the house, retirement accounts, brokerage accounts, and vehicles. However, forgotten items may be valuable or emotionally meaningful, and if neglected in a divorce settlement, they can pose serious problems later. Often overlooked assets include burial plots, antiques, sentimental items, pets, social security benefits, and intellectual property.
Burial Plot – During the later years of marriage, many couples buy a cemetery plot where they intend to be buried together. However, if they are getting divorced, they won’t want to be buried next to each other. Many couples buy their burial plots as joint tenants and unless one owner releases rights to the plot, they will share ownership and this can be a serious problem, especially if there is a remarriage. If the divorce settlement doesn’t specify who owns the burial plot, the entire family may need to become involved in deciding what to do. The burial plot should be valued, listed on the marital property inventory, and assigned to one of the parties in the divorce settlement. The alternative is to sell the plot—which should be negotiated with the cemetery owner.
Antiques – Antique furniture may be valuable and therefore important to consider when dividing assets. The first thing to determine is whether the antique was inherited or purchased while the couple was married. If the antique was inherited, then it belongs to the person who inherited it. On the other hand, if the antique was bought while the couple was married, it’s marital property and needs to be divided in the divorce settlement. It’s best to have a professional appraisal of antiques so the parties can agree on a fair value.
Sentimental Items – Examples of sentimental items that can be especially important in a divorce include family pictures, children’s school records, letters from family members, a family Bible, books, children’s art work, and baby clothes. None of these items has much monetary value, but they can be important to both parties and engender a good deal of animosity when trying to divide them. In the case of family pictures, the easy solution if to make digital copies. The same can be done with children’s school records and family letters. However, who gets the family Bible, books, art work, and baby clothes? These items can’t be duplicated, so they need to be allocated between the parties. One way to do that is to allow each party to choose an item from each category in order, with a flip of a coin deciding who goes first.
Pets – Most pets have little more than sentimental value. However, because of the strong emotional attachment people have to their dogs and cats, disputes about who get the pet can be contentious. The best strategy is to discuss who will keep the pet when the parties separate. If there are two pets, it’s easier because each party can keep one. However, if there is just one pet, the situation if more difficult. One solution is to buy another similar animal and then draw lots to see who keeps the original and who gets the replacement.
Social Security Benefits – According to federal law, Social Security benefits are the separate property of the party who earned them, so there is no need to divide this asset when a couple divorces. However, if a couple has been married for ten years of more, the spouse who didn’t work may be eligible to receive benefits based on his or her ex-spouse’s work record. The Social Security Administration says that a divorced spouse’s Social Security benefit is equal to one-half the benefit of his or her spouse’s full retirement benefit. Insert a clause in the divorce settlement obligating the Social Security beneficiary to cooperate with his or her ex-spouse in this matter to ensure it doesn’t become a problem later.
Intellectual Property – An overlooked asset is intellectual property, such as a patent, copyright, or trademark that may be sold or produces income. If the intellectual property was acquired prior to marriage, it’s the separate property of that spouse. However, if the intellectual property was acquired during the marriage, it’s a marital asset and needs to be divided. If the asset produces an income stream, then it can be valued by discounting the future income to present value. The other alternatives are to have the intellectual property valued by a professional assessor or offer it for sale.
Gray divorce couples who opt for a collaborative divorce will find that dividing their marital assets is less contentious because the collaborative process is founded on interest-based negotiation. This means the parties receive assets that are important to them because they are in charge of the allocation, rather than allowing a judge to decide who gets the burial plot, antiques, sentimental items, pets, and a copyright, trademark, or patent. Moreover, because participants in a collaborative divorce don’t end up hating each other, they are better able to divide assets reasonably based on preferences rather than spite.