If you and your spouse have decided to go your separate ways, you’re facing the daunting task of dividing one household into two households. This is an unquestionably stressful challenge and it’s more than okay to admit that out loud.
The great news is that Iowa is an equitable distribution state, which means that you and your spouse don’t need to (necessarily) divide your marital assets 50-50 like you would if you lived in many other states. On the other hand, determining what “equitable” means under your unique marital circumstances can be a complicated undertaking.
Valuation of Marital Assets
As an experienced family lawyer – including those who practice at the Law Group of Iowa – can confirm, the state of Iowa does not mandate that spouses divide the value of their marital estates in a 50-50 split. Of course, if this is the route that you and your spouse want to take, you’re empowered to make that agreement. However, if a different distribution of marital assets would be fairer under the circumstances, you can pursue that alternative approach as well.
A marital estate generally consists of the assets and liabilities that a couple acquires over the duration of their marital union. Meaning, any property, financial assets, intellectual property, debts, etc. – anything of value and any liabilities – that you newly acquired during your marriage will likely be considered elements of your marital estate.
There are some exceptions to this broad rule. For example, if your parents passed away while you were married and you received an inheritance that was exclusively gifted to you, you may be able to treat that asset as non-marital property. However, such classifications get tricky when spouses use non-marital assets in joint ventures.
Before you can calculate the value of your marital estate, you’ll need to determine which assets are part of the estate and which are non-marital assets. You’ll want to speak with an attorney for guidance if you and your spouse can’t agree on the classification of one or more assets. Once the marital estate has been “defined,” you’ll be able to assess its value and determine how that value should be split.
Dividing Your Marital Estate Equitably
In the above inheritance-based example, you may find yourself in a sticky situation if you – for example – used your inheritance to start a family business that employs both you and your spouse. The inheritance is a non-marital asset but you’ve both contributed time and energy to the running of the business. In this scenario, an attorney can help you calculate what portion of the company’s value should be distributed to each of you based on the fact that it was initially funded via a non-marital asset but cultivated utilizing the efforts of both parties.
Dividing marital assets can be more difficult than simply splitting the value of a marital estate down the middle. However, investing the time to figure out what equitable means under unique circumstances tends to produce a result that may be far more fair than a 50-50 divide would be.