June 1, 2015
Divorce is ultimately about dividing assets and therefore, of course, having a complete list of assets is extremely important. There are several resources you can use to help gather asset and liability information, including the Financial Affidavit and the list of documents required by New Hampshire Family Division Rule 1.25-a. These do a good job of identifying and quantifying most traditional financial assets such as bank accounts, retirement accounts and life insurance cash value, and liabilities including loans and credit card debt.
However there are items that don’t fall neatly into the definition of assets and liabilities and may be overlooked in the divorce process. Capturing these assets is difficult if you don’t know the right questions to ask, or the right place to look. Most people are not trying to hide assets but they don’t consider some of their holdings to have a significant worth, or they actually have no idea that something like a club membership has a value. Over the years I have created a list of assets to review with my divorce clients that covers more potential items of value than the traditional forms.
Tax Refunds: Most people don’t think of this as an asset but it is the same as cash in the bank.
Seasons Tickets: The value of seasons tickets can be difficult to assess. If the team or show is in high demand they can be worth more than the face value.
Rewards Points: Air miles, hotel points, credit card points – these can all add up to a pretty sizeable reward. Some are easy to value because they are convertible to dollars. Others may be harder to put a price on due to the rules of conversion.
Capital Loss Carryforward: If the couple had big investment losses in the past they may be carrying forward a loss that can be used on future tax returns. It’s easy to forget about this, especially if they rely on an accountant to do the taxes.
Country Club Membership: Getting into that country club wasn’t cheap, and the membership could have a big resale value.
Collections and Memorabilia: Don’t overlook the value of any collection from stamps, comic books and Hummels to arts and antiques. Have everything valued professionally.
Deferred Compensation: Out of sight, out of mind – that’s what happens when compensation is deferred to a later date. The employer will be able to provide a statement of value as well as the terms of the payout.
Pensions from Previous Jobs: Many people tend to forget about a pension they earned at an employer from many years ago. The employer will have to be contacted to obtain a current estimate of the pension income.
Retained Earnings: If one party owns a company he or she may be entitled to retained earnings, which are a portion of the company profits that were kept in the company instead of being paid out.
Cemetery Plots: Chances are the couple is no longer going to want to be buried next to each other. If cemetery plots have been purchased they may want to try to sell them or have one party take both plots.
When I come across an asset I haven’t seen before I add it to my list of items to review with divorce clients. I am sure they will continue to surprise us so we have to be thorough and diligent about uncovering all of the potential value of a couples’ net worth.
