How does a marital estate add up in the real world?

In our prior post, we discussed the importance of documentation in the determination of a martial estate for the purposes of property division during a divorce. Understanding what assets are included isn’t the only part of the process. The other side of determining the marital estate is to understand the assets themselves.

What we mean by understanding the assets is to also appreciate how those assets work in the real world. Retirement accounts are a great example. On paper, a 401(k) and a Roth IRA might have an equal value, but when the benefits are actually paid, tax consequences make one more valuable than the other.

The house is often one of the most valuable assets in the marital estate, but how should that value be considered for property division? The physical home itself can’t be divided in half if one spouse wants to stay in the house alone. On the other hand, if the home is sold, the profit from the sale can be easily split in two.

What about delaying the sale of a home? A couple can include terms about a future sale in a divorce settlement and still retain the marital tax exemption.

What about health insurance? After a divorce is finalized, a common solution is to seek COBRA coverage. This coverage lasts for 36 months past a divorce, but it can be very expensive. The premiums that the spouse must pay are no longer supplemented by the employer, and then there is an added administrative fee as well. Under the Affordable Care Act, going without insurance could be a costly decision. Should these costs be considered?

Thinking about the big picture can seem overwhelming at first, but a Fort Worth divorce attorney can walk a spouse through the process step by step, explaining everything.

Source:, “Keep an Eye on Finances During Divorce,” Kiplinger, May 23, 2014