During a divorce, one of the most challenging areas to tackle is division of the family’s assets and liabilities. Between brokerage accounts, retirement accounts, pensions and the family marital residence, splitting assets during divorce can get pretty contentious as emotions run high.


What may once have been considered “ours” now gets thought of as “what’s mine is mine” especially when discussing retirement accounts and pensions. Temperatures rise when one or both spouses take the position that their retirement account or pension is something that he/she “earned” and their spouse has no right to receive any portion of it. Of course, we know that this is not the case and there are clear ways to define how splitting assets during divorce should be done: the rules of equitable distribution can help determine what portion will be divided among what is marital, and what is non-marital.


Furthermore, the issue of how to handle the marital residence also raises many questions when splitting assets during divorce.The couple will need to consider some difficult questions, such as:

  • Who will remain in the marital residence?
  • How long will that person be able to stay there?
  • Will the house get sold?
  • Should one spouse buy the other one out?


And when there are minor children still living at home, more questions need to be answered. When splitting assets during divorce, many couples opt to sell the marital residence, split the proceeds and go their separate ways in a new location. This seems like a simpler solution to a complicated problem and can be mentally and emotionally beneficial, allowing both parties to start fresh.

Above and beyond these common scenarios, one of the more complex issues for a couple splitting assets during divorce is when there is a family-owned business. This always presents unique challenges to the clients and their attorneys.


Some questions to consider:

  • Does one spouse own the company?
  • Was it passed down through generations within that spouses’ family?
  • Are there sibling partners involved?
piggy bannk splitting assets during divorce

This issue could certainly throw a monkey wrench into what otherwise could have been a relatively straight-forward financial negotiation.

Is the other spouse a silent partner without a day-to-day working knowledge of the business? Normally, if only one spouse is actively involved in the company, the other spouse will be appropriately compensated once a forensic accountant has been engaged to determine the value of the business and the marital portion to be awarded to the non-owner spouse.

However, the situation may be more complicated when both spouses are owners AND hold important positions within the organization.

What happens if both spouses are vital to the ongoing success, profitability, and value of the company? Will they be able to work together in the future? They and their advisors must weigh advantages and disadvantages of trying to divide the corporation between the spouses versus having them continue to work together, IF that’s even a viable option.

Can they continue to work together? Should they? Is either spouse so indispensable that the business would suffer irreparable damage due to their departure? Will the profitability and viability of the business suffer if one spouse leaves? Can the remaining spouse buy the other spouse out of their share? Is there a buy/sell agreement in place? Is the company an asset that can be sold or is it a business that is dependent on the intellectual capital of one or both of the spouses? And, let’s not forget liabilities! Is the business in debt? Is this debt the responsibility of one or both parties in the marriage? Is there cash available? All of these questions need to be addressed before a determination can be made regarding how the business will be handled as an asset.


With all these questions needing answers, there is some positive news.


The loss of value due to the departure of one spouse after divorce can be temporary. The health of the company may actually improve after the spouses have gone their separate ways… just like ending a bad marriage might improve the lives of the now separate individuals. Neither scenario is out of the realm of possibility … it all depends on the individuals involved and the compromises that can be reached during negotiations.

Donna la Scala - Splitting Assets During Divorce, Better Apart Blog Gabrielle Hartley

Donna E. LaScala, CDFA, RFC, CLTCis the President of Comprehensive Divorce Solutions LLC. and has been in the financial services profession for over 30 years.

Holding professional designations of RFC (Registered Financial Consultant) with IARFC Ethics Approved Status, CDFA (Certified Divorce Financial Analyst) and CLTC (Certified in Long-Term Care).  Donna is dedicated to providing a personalized approach to meet each client’s needs and individual goals.

Donna is a member of the New York State Council on Divorce Mediation, is trained as a Collaborative Financial Neutral, is a member of Long Island Collaborative Divorce Professionals (LICDP), the IACP (International Association of Collaborative Professionals) and the ADFP (Association of Divorce Financial Planners).  In this capacity, she assists in the valuation of assets during separation and divorce proceedings including retirement accounts, personal accounts and closely held small businesses. She assists clients in building a roadmap for their post-divorce financial future and helps mediators and attorneys develop and execute equitable distribution of assets with a personalized client-centered approach.

Donna also serves on the Board of Directors of the Financial Planning Association of LI and is the Chair of the Women in Finance Committee.  In addition, as a member of the Moxxie Network and Moxxie Foundation she chairs the Show Me the Money Club and is a Junior Moxxie Mentor helping young college women in their quest to be successful business women.

Website: www.donnaelascala.com

LinkedIn: https://www.linkedin.com/in/donna-la-scala-rfc%C2%AE-cdfa%C2%AE-b42839120/

Facebook: https://www.facebook.com/Donna-LaScala-RFC-CDFA-105185277723070

Phone: 516-218-6919

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DISCLAIMER: The commentary, advice, and opinions from Gabrielle Hartley are for informational purposes only and not for the purpose of providing legal advice or mental health services. You should contact an attorney and/or mental health professional in your state to obtain advice with respect to any particular issue or problem.


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