You need to know what you and your spouse are worth together and what you're worth on your own. It sounds like a lot to assess and calculate, but it comes down to a simple equation:
Net Worth = Assets - Liabilities
There are three categories of assets:
- Joint Assets – Assets you have built together, including savings accounts, money market accounts, mutual funds and a co-owned business.
- Your Assets – Accounts that you opened before you were married and have been the only contributor to. Things that you owned before you married are also included in your assets.
- Spouse's Assets – Anything your spouse opened or owned before the marriage, including an individual IRA or assets inherited from family members.
You're both entitled to a portion of each other's retirement benefits that were earned during marriage. In order to get part of your spouse's pension or 401(k), you'll need a lawyer to draw up a qualified domestic relations order, or QDRO (pronounced "quadro"). There are several options, including a one-time payment, monthly payments at retirement, or a lump-sum payment that you transfer directly into your own IRA, where your money will continue to grow tax-free until you retire. IRAs can be divided without a QDRO, as long as the division is clearly specified in your divorce agreement.
Consider future value, since assets such as a pension could be valuable down the road.
You may need to appraise real estate, artwork and collectibles to determine their value. If you co-own a business, you will need to assess its value to determine the amount needed to buy out the other spouse's share of the business.