In a recent blog post, we talked about marital property tracing, which is necessary when dividing property in a divorce or dissolution; as a general rule, only marital property, not separate property, gets divided in divorce.
However, people often forget about many types of assets when thinking about their marital property. When thinking about property, most people think about the big things and the tangible things such as houses, cars, retirement accounts, bank accounts, jewelry, and so on. Items with particular sentimental value, like certain antiques and/or artwork, are also easy to remember. But just because an asset does not come to mind during the division of marital property doesn’t mean that it is not valuable—or that you’re not entitled to some of that value.
Commonly Overlooked Marital Assets
An important reason to work with an experienced family law attorney is to gain assistance in identifying and recalling assets that would otherwise be overlooked. Commonly forgotten marital assets include things such as:
- Prepaid rent and security deposits
- Utility deposits
- Car lease deposits
- Memberships (such as gym, country club, or yacht club)
- Income tax refunds
- Income tax capital loss carryforwards
- Income tax charitable contribution carryforwards
- Intellectual property such as patents, trademarks, copyrights
- Licenses (liquor, broadcast, commercial driving)
- Reward program points, such as hotel points or frequent flyer miles
- Season ticket options and personal seat licenses (PSL)
- Entertainment tickets
- Remainder interests in land
- Digital assets and downloads
- Contents of safe deposit boxes
- Collections, such as stamps, coins, baseball cards, movie memorabilia
- Employment perks (use of a business car or phone for personal use; company-paid travel or insurance)
- Unused vacation, sick days, or other paid time off (PTO)
- Stock options and restricted stock units (RSU)
- Prepaid life insurance and burial plots
- Royalties from gas, oil, or mineral leases
- Bingo, lottery, or gambling wins (minus losses)
- Property in storage units
Some of these assets may be worth more than others, of course, but certain assets could be worth a surprising amount. Stock options may be worth nothing today, and you may not even be thinking about them as “property” because they cannot yet be exercised. But some employees of startups are compensated with stock options early on in the company’s life cycle when the company is cash-poor; later, after the company has grown and the options are exercisable, the holder may go from ordinary employee to millionaire overnight.
Other assets may seem unimportant, or even burdensome, but you might want to take a second look at some of them. You might be happy to let your spouse take the country club membership with its exorbitant dues, not realizing that the membership may be able to be sold back to the club (often for much more than it cost initially, as the club can resell it). Negotiating away certain assets that are important to your spouse will make it easier to concede on an important issue for you.
In short, you should never assume that an asset has no value in marital property division. It is better to identify something as a possible marital asset rather than to let your spouse claim it as separate property, only to find out later it was worth much more than you believed.
How to Be Thorough in Marital Property Tracing
When you work with an experienced Ohio family law attorney, the attorney will work with you to make sure you think about all possible assets that could make up part of your marital estate. That includes not only assets that may be primarily in your spouse’s control, but those that are in yours. You do not want to be accused of concealing assets during the divorce process.
In Ohio, spouses are required to disclose all assets to each other in a divorce or dissolution on required Affidavits of Property and Debts. Sometimes, failure to disclose an asset is unintentional; we’re willing to bet that many people accidentally neglect to disclose some of the assets listed above. But even if you didn’t intend to conceal an asset, it is possible that a court could conclude that your failure to disclose was willful. In that case, the court could decide to punish you.
Ohio is an equitable distribution state, which means that courts try to divide property between spouses in a way that is equitable. In practice, that usually means that property is divided equally. But if a court finds that one spouse has concealed property, it may issue a distributive award to the other spouse. Ohio Revised Code Section 3105.171(E) states in part that:
“(4) If a spouse has engaged in financial misconduct, including, but not limited to, the dissipation, destruction, concealment, nondisclosure, or fraudulent disposition of assets, the court may compensate the offended spouse with a distributive award or with a greater award of marital property.
(5) If a spouse has substantially and willfully failed to disclose marital property, separate property, or other assets, debts, income, or expenses as required under division (E)(3) of this section, the court may compensate the offended spouse with a distributive award or with a greater award of marital property not to exceed three times the value of the marital property, separate property, or other assets, debts, income, or expenses that are not disclosed by the other spouse.”
In other words, there are steep penalties for failing to disclose assets during a divorce. If you inadvertently failed to disclose something you should have, contact your attorney immediately to determine what action you should take. If you have reason to believe that your spouse is concealing assets in your divorce, provide your attorney with as many details as possible so that he or she can pursue what you are entitled to.
To learn more about marital assets and property tracing, contact Melissa Graham-Hurd & Associates to schedule a consultation.