The 9 Things You are Most Likely to Forget in your Property Division
I am all about helping clients to work with their ex as much as possible to resolve matters in their separation themselves. I’ve had numerous clients approach me with an agreement they had reached with their ex about their property division that they needed me to finesse into an appropriate legal document.
In most cases, in their understandable preoccupation with obvious assets such as the home and bank accounts, there has been something that the client and their ex had overlooked. When I raise the missing issue or property item, I usually get one of two responses: “oh, we didn’t think about that” or “I didn’t realise that was relevant to the division!”. I’m fine with this. That is my job – to help them cover off everything and to catch the bits they may have missed.
I don’t want you to miss anything so I am shining a light on the 9 top property matters that get overlooked when an “uncoupling couple” are working through the division of their property…
Previous Legal Arrangements – hard to believe but often people don’t remember a previous agreement such as a pre-nuptial agreement or contracting out agreement that they signed. Maybe you entered into a Deed to create a Trust that hasn’t been properly considered. Some don’t think these things are important or inconvenient because they will just agree to do things the way they want. Others may assume that previous legal arrangements they entered into aren’t important because a lot of time has passed. Listen up. Previous legal arrangements are ALWAYS important for your lawyer to know about.
Flopsy and Kruger – yes, I know they may be your fur babies or perhaps even your favourite child but they so often get forgotten about or overlooked when it comes to sorting out who is keeping what. Although some jurisdictions have seen cases where “custody” arrangements for pets are ordered, in most jurisdictions pets are treated in law in the same way as your microwave or stereo – another chattel to be divided. Because they mean so much more to us than our microwave does, what happens to the pets can become a potentially heated issue when dividing up the property so be sure to turn your mind to it early on!
Retirement savings – I am surprised at how frequently people express surprise when I tell them all, or some of, their or their ex’s retirement savings need to be included in the pot of assets to be divided. Depending on where you live, these schemes will be known by different names, take different forms and be treated differently in law. Add them to your list!
Tools – ok, I know this is a gross generalisation but my experience is this is one asset that women particularly show little interest in. If that’s you, you should! Firstly, because they can sometimes be worth a lot of money. Secondly because, girl, you are going to need some of these tools! I recently had one client prepare a toolkit up for his former wife because he knew there was going to be a day when she was going to need to reach for a screwdriver or hammer (likely in the midst of a repair nightmare) and realise she had none. Don’t be that woman. Put the tools in the mix and negotiate which you’d like to keep. If there is a sizeable collection of tools or specialist items, do check on the value of them as they could be worth more than you realise.
Debts Owed to or by Family– most of us are all over what we owe on mortgages or credit cards but what often debts with family get overlooked. What you thought was a gift by a parent may have been a loan from that parent. Money you think was given to you both from a family trust may have been a loan or come with conditions. That deposit for your home that you thought was an inheritance may also have been an advance or loan from an estate. Similarly, money lent to family members may have been overlooked. All of these need further examination and taking account of.
The tax man - Clients have often come to me feeling happy with what they have organised between them until I point out the tax man will also be taking a slice of their pie. Depending on where you live, the property you are dealing with and how you are trying to deal with it, there can be tax implications. Knowing what those are likely to be when you are considering your options for dividing up your property allows you to make decisions knowing how much, if any, of your property pool will be diminished by tax under each option.
Work related entitlements – Yes, accrued leave, bonus entitlements, employee share options or other work benefits that were accrued during the marriage might also fall into the asset pool to be divided so gather up that information also.
Loyalty points – who is going to get the benefit of those airpoints or store loyalty points that you’ve been carefully squirreling away during your relationship or marriage? I’m not suggesting you haggle over that tenth free coffee at your local café but I have seen some pretty impressive airpoints balances and loyalty points accrued up that my clients hadn’t thought of. Once even bought her new couch with her share of the points.
Life Insurances – have you or your ex got life insurance? Did your parents start a life policy for you as a child? Most modern policies that I come across do not have any savings component. A payout under the policy is only made on the death or trauma. However, every now and then, a client or their ex will have an older policy that has a savings component attached to it which means, on cancellation, there is a nice amount payable to them. The value of that may well be property to be divided between you.
Even if there is no savings component, it pays to check who owns the policy over your life. If it is your ex or both you and your ex, any life assurance payment made on your death will go to you ex. Do you really want that? Didn’t think so. Not overlooking the life insurances means you can have them set up the way you now want them set up.
There they are - the 9 things most likely to be missed as you think about the division of your property! Had you missed anything? Was this useful? Let me know in the comments or over on Facebook at The Divorce Lighthouse Group. If you think a friend may find this useful, share the love and forward this to them!