The more income and property spouses acquire during a marriage, the more challenging it becomes to divide those assets when they divorce. Equitable distribution rules require that spouses divide what they own with one another in a fair manner.
Doing so can be relatively challenging with a well-diversified portfolio. Valuing assets, determining what, if any, assets could be separate property and finding reasonable ways to split assets can all be difficult with an expansive marital estate.
Non-liquid assets can be among the most difficult to address during the property division process of a divorce. These are assets that can’t be converted into cash easily or inexpensively.
What solutions are available?
Non-liquid assets by their very nature can be difficult to divide when spouses divorce. They may not actually be divisible because the spouses may not be able to access them for a set amount of time. Attempts to access non-liquid assets could result in a substantial reduction in value due to taxes, penalties and provisions included in investment agreements.
As such, spouses frequently need to identify their non-liquid assets early in the divorce process and establish a reasonable fair market value for them. These can include real estate, ownership of a business, private equity and valuable collectibles. From there, they can decide which spouse retains their non-liquid holdings and find solutions for offsetting their value in a fair manner. The allocation of marital debt can also play a role in balancing the value of non-liquid assets during a divorce.
Non-liquid assets can be a stumbling block during property division negotiations or litigation. Having experienced legal guidance during a high-asset divorce can help spouses protect themselves