Collaborative Divorce: Do We Really Have to Split Everything 50/50?
(Half and half!)
If you go through divorce, will you really have to divide all your property 50/50? It's a great question, and the answer is both yes and no. Here is how the property division process often plays out:
The first step, and it’s a crucial one in a Collaborative divorce, is for your team of professionals to get a clear picture of your complete financial landscape. This means understanding:
All your assets: What do you own? This includes everything from real estate and bank accounts to investments, retirement funds, and valuable personal property.
All your debts: What do you owe? Mortgages, car loans, credit card debt, student loans: we will look at it all.
Your current and future income: What's coming in now, and what do you anticipate for the future?
Once we have this comprehensive overview, we will delve deeper to understand the origin of these funds. We’ll ask questions like:
Did either spouse have these assets before the marriage?
Are there any prenuptial or other marital agreements that outline how specific assets should be handled?
Was any of the money inherited by one spouse?
This process helps us categorize assets and debts as either "community property" (belonging to the marital community) or "separate property" (belonging to an individual spouse).
With this clear understanding of everything you own and owe, and a general idea of what falls into community versus separate property, we have an excellent starting point. From here, we can begin to strategically determine how accounts might need to be reallocated and, most importantly, what steps we can take to ensure that both you and your spouse have what you need to move forward.
Consider this real-world scenario:
A couple in their 30s, married for 10 years, have decided to divorce. After a full accounting of their assets and debts, they realize that one spouse has saved significantly more in individual retirement accounts, while the other carries a higher balance of student loans.
In a traditional divorce, this could lead to contentious arguments over who "gets" the retirement savings and who "owes" the student loans. However, in a Collaborative divorce, we can approach this differently. We will help you look at the overall financial picture. The goal is not just to divide everything down the middle, but to ensure that both individuals emerge from the divorce with a fair and equitable foundation for their future. This will likely involve a discussion of both spouses’ future earning potential and exploring options like offsetting assets against debts or creative payment structures.
Ultimately, while Washington State law provides a framework for property division, Collaborative divorce empowers you to find tailored solutions that prioritize a comprehensive and fair financial outcome, even with complex asset and debt profiles. The goal is to create a strong foundation for both your and your spouse's futures.