Which assets should you prioritize during divorce?

If you’re going through a divorce, the division of your marital assets is going to be one of the most consequential steps in the process. Prioritizing which assets to focus on during negotiations or litigation can significantly impact your financial stability and future well-being. 

The priority that you give to each asset will depend on your personal circumstances, financial goals and long-term needs. You’ll want to do what you can to keep a level head about this process, as making emotional decisions – as opposed to objectively rational ones – could negatively impact your divorce process and your financial stability moving forward. 

Major considerations

A family home is often one of the most significant assets in a divorce. Deciding whether to keep or sell the home is a major decision. If there are children involved, the desire to maintain stability for them may influence this decision. However, it’s important to consider the affordability of keeping the home, as it involves not just the mortgage, but also taxes, insurance and maintenance.

Next, retirement accounts, such as 401(k)s, IRAs, and pensions, may be crucial for long-term financial security, depending on how old you are and how long you have been contributing to these kinds of accounts. Understanding the value of these accounts and the rules for dividing them in a divorce is important. Often, a Qualified Domestic Relations Order (QDRO) is required to split these assets without incurring early withdrawal penalties or tax implications.

And although additional financial assets are potentially important, it’s important to keep personal property, including items like cars, jewelry, art and collectibles in mind too. While these assets may have less financial value than real estate or retirement accounts, they can have significant sentimental value or potential for appreciation.

Finally, you’ll want to keep in mind that debt is also a consequential part of the financial picture in a divorce. Understanding who is responsible for marital debts, such as credit card debts, loans and mortgages, will impact your finances moving forward. 

Each divorce is unique, and your priorities will necessarily vary based on your individual circumstances. As such, you may benefit from personalized legal guidance tailored to your specific needs.