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Only in Divorce, Your Worth is Determined by Numbers - Knowing Your True Net Worth
Have you ever been told that you are worth your weight in gold? Well, in a divorce, you are only worth what you can equitably distribute and it all comes down to dollars and cents. One of the hardest things to do is to determine your net worth status as a couple when it comes to a divorce, yet it will give you an idea of where you will end up when the ink is dried.
Creating a spreadsheet of all assets as well as all debts will allow you to see in a glance what assets will be available for an equitable distribution. In a spreadsheet format, you can then analyze the numbers and make adjustments in order to have both parties end up with an equitable distribution.
There are, however, some assets that fall into a grey area for calculating a straightforward value. For instance, the value of an IRA or 401K account is not the face value of the account as it is a taxable entity upon liquidation and is not available until retirement without penalty. Be aware of these grey areas before settling to avoid devastating surprises in your post divorce life.
Inherited or gifted items also fall into a grey area for straightforward allocation of net worth but can be used for the purposes of distribution or “buying out” when one party wants something otherwise not attainable through the dividing of marital assets.
A valuation of a business entity is a bit more complex and deserves the attention of a hired forensic accountant to evaluate all the aspects of the business so it is neither inflated nor deflated by either party. A fair distribution of assets is the goal to a less disruptive divorce process and post divorce relationship.
Divorce boils down to a business transaction so the earlier this concept is adopted by both parties, the quicker and more amicable it will be.
New Jersey has five types of spousal support. Rehabilitative alimony is a short-term monetary award that allows a spouse to go back to school or obtain training to re-enter the workforce. Limited duration alimony is awarded in cases of a short marriage when rehabilitative alimony doesn't apply. Reimbursement alimony is awarded when one spouse makes a personal sacrifice so that the other spouse could receive professional or career training. Alimony pendente lite is awarded when a divorce is pending so that both parties can maintain their current standard of living until a final judgment is made. Finally, there is permanent alimony which is usually appropriate in long term marriages and typically terminates upon the death of either party or remarriage.
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