Tennessee spouses who are in the throes of a divorce — whether it’s contentious or peaceful — will need to find a workable solution to divide their assets. If the spouses themselves can’t come to a solution on their own, then a family court judge will decide the matter. Ultimately, the assets will get divided one way or another. Therefore, spouses need to consider the fairest methodology to divvy things up.
Most spouses who own a wide array of property together — such as real estate property, vehicles, works of art and other valuables — know the importance of getting an accurate appraisal of the property before deciding how they will divide it. They also know to consider the tax liabilities associated with liquidating various property. What they may not remember, however, is to consider how liquid the property is.
How liquid is the property in my marital estate?
The value of a particular piece of property — no matter what it happens to be — is perhaps the most vital consideration when dividing marital assets, which will include items like:
- Equity in real estate property
- Business ownership
- Professional practices
- Retirement accounts and retirement pensions
- Investment accounts
- Stocks, mutual funds and bonds
- Savings and checking accounts
- Art, antiques and collectibles
- Recreational vehicles
- Other assets acquired or earned during your marriage
The value of the above assets, however, may be meaningless if it’s difficult or impossible to sell them. Imagine your family owns thousands of acres of swampland in the middle of nowhere, for example, and it holds a value of $4,000,000. Meanwhile, your family also owns a Florida beach house valued the same. Obviously, once both of these properties go up for sale, the beach house will sell more quickly. Therefore, in terms of liquidity, the beach house is a far more valuable piece of real estate.
The above situation is an extreme example to illuminate the importance of liquidity. In many cases, the liquidity of certain assets may not be entirely clear and requires research and investigation to evaluate.
Remember all the details during your asset division process
Spouses must remember the liquidity of all property within their marital estate — in addition to value and tax considerations — to ensure that the division of this property is fair and equitable. Failing to do so could result in financial hardship as you emerge from your divorce process.