You might have said “until death do us part,” but if you end up parting before death, you’re probably going to have to figure out how to split up a lot of stuff.
Some assets are straightforward — just numbers on a spreadsheet, really. The only work involved is some basic math. Others are more complicated. If you and your spouse jointly own real estate or valuables like antiques, you’ll probably need to hire an appraiser, for instance.
And there are some assets that have the added trouble of being something that neither party want: like a timeshare. In an interview with THE EXIT, Missouri divorce lawyer Anne Moody Johnson recalled a recent case she handled where a couple was fighting over who had to be stuck with their money-losing timeshare in the Lake of the Ozarks.
“Nobody wants the timeshare,” she said, laughing. It ended up being foisted off through negotiations. “One party was getting some significant concessions in other areas, so the other one said, ‘you’re taking this.’”
Apart from poorly chosen vacation investments, there is a limitless spectrum of messy or unusual assets that couples need to figure out how to divvy up when they get divorced. Once they get to talking about the subject, it’s not hard for divorce lawyers to come up with a list of all sorts of weird and uniquely complex assets they’ve had to deal with. Here are some of the highlights mentioned by divorce lawyers in recent interviews with THE EXIT:
When a marital asset is ownership in a publicly traded company, figuring out a fair split isn’t too complicated. Again, the issue usually comes down to looking at a spreadsheet and doing some math. But when the asset is a small business, particularly one that largely relies on cash, like a contracting business or a restaurant, a divorce lawyer will likely have some serious forensic work ahead of them.
“I’m sure people just flat-out lie” about the money they make from these businesses, or what their stakes are worth, Johnson said.
A New York divorce lawyer, Beatrice Leong, told us that she had a situation where one spouse owned a gas station and was making millions of dollars a year, but it was difficult to prove in court because most of the money was in cash. What can a lawyer for the other party do in such a situation? Leong said it can sometimes be necessary to hire private investigators, and build a dossier on a person’s lifestyle, including whether they spend a lot of money routinely on lavish getaways…or gambling.
“I’ve subpoenaed casinos,” she said.
Unusual real estate arrangements
A house with a mortgage can be troublesome enough — especially if both parties are on the loan, and the person who keeps the house refuses to refinance and take the other party off — but if you throw in some other weird elements, the details can be dizzying. Leong said she handled a divorce where one party owned a plot of land, but the other party covered the lion’s share of the cost of building a mansion on it. That was a bit tricky to work out. There are also situations in places where real estate is exceptionally expensive, like in New York, and real estate owners often have unusual financial arrangements, possibly with relatives. Off-the-books gifts and loans aren’t unusual in places like NYC, where the median home sale price is currently a bit over $750,000, according to PropertyShark.com. The off-the-books arrangements add layers of difficulty to working out who gets what and who owes what to whom.
Art, antiques…and guns
Beauty is in the eye of the beholder, and so some extent the same goes for the value of art, antiques, and other unique items. “Sometimes it becomes a case of competing expert valuations and the judge is left having to decide which value to accept,” Scott Ellerin, a divorce lawyer based in Jacksonville, Florida, told us. “You can have wildly different appraisals or opinions on value.” That’s quite common with high-end artwork, he added.
In rural Missouri, divorcing couples don’t necessarily have a lot of expensive antiques or art pieces to squabble over. But they do often have valuable gun collections. Johnson, an attorney based in rural Missouri, said it’s not uncommon for her to have to seek appraisals for guns when divorcing parties can’t agree on a value.
This one probably only comes up in big cities where taxi operations are a major source of business. In New York City, taxi medallions — official permits allowing owners to operate yellow taxi cabs — were once worth millions of dollars. But the rise of app-based ride-hailing services like Uber and Lyft has caused the value of medallions to suddenly plummet.
Leong said she dealt with a divorce where the couple were disputing ownership of a $2 million taxi medallion. But over the course of the fight, Uber infiltrated New York and the medallion’s value dropped to almost nothing. The parties ended up with $400,000 in debt instead because of a loan that had been taken out on the medallion.
“It was just poor timing. They should have just sold it,” Leong said. “What ended up happening is one of the parties just took the debt.”
Offshore accounts won’t necessarily protect you from U.S. tax authorities. The government has been cracking down on tax evasion via foreign jurisdictions in recent years. But foreign accounts could still thwart your soon-to-be ex-spouse and his or her lawyer. Divorce lawyers who spoke to The Exit said that even if they can find and identify the assets, it is hard to know whether a foreign jurisdiction will uphold the judgment. “Certainly, if you have foreign assets, those are going to be a problem,” Johnson said.
Crypto and NFTs
Crypto values aren’t theoretically hard to figure out – there are public ledgers where people who know what they’re doing can verify the existence of the asset at a glance, and plenty of crypto exchanges can offer a quick sense of how much it is worth. “This is fairly similar to stock and investment accounts,” Ellerin said. “If you have a certain amount when you file, and then passive market forces impact the value – you can argue to use a later valuation date.”
But because they are a “newer” type of asset, not every lawyer knows how to deal with them. NFTS, or non-fungible tokens, which are sort of cousins to cryptocurrency but are unique digital assets (like artwork), could also reasonably become part of a divorce action. But so far, Johnson, Ellerin and Leong said they haven’t had to work with them yet.
“No NFT’s yet (surprisingly),” Ellerin said. “But lots of crypto. Over the last few years this has increased dramatically.”