What does Balance Sheet mean? Just like a company, you and your family have measurable assets and liabilities. When you are getting divorced and dividing the assets, you need to determine the values and ownership titles so you can divide them fairly.
Assets include your house, cars, furniture, stocks, bonds, pension, annuities, boat, royalty income, land, family businesses, real estate, investments, insurance, cash, retirement 401k funds, frequent flyer miles, vacation home, jewelry, artwork, bank checking and savings accounts.
Some assets are not measured in dollars – education, job experience, integrity and reputation, but worth a lot… Your ability to earn income from a job is an asset that does not go on your Balance Sheet but is of value.
Liabilities can be credit card debts, future college expense for your kids, mortgage, equity line, car loan, medical expenses, life insurance, taxes,student loans, vacations, home repairs, automobile expenses…Annualcreditreport.com is a good free summary of all of your public liabilities.
You are wondering why I should care how the asset is titled. When you are getting divorced it becomes important to know who owns this asset. (Who is on the title?) . Hopefully the house title is in both names if the mortgage is. Unfortunately sometimes the mortgage is in both names with the title in just in one person’s name.
So doing an analysis of all your assets and liabilities value and titles is one of the first things you can do to prepare for a separation of assets. Another good source of information is your income tax returns, monthly statements and appraisals of properties. You can obtain previously filed income taxes by going to www.irs.gov and filing form 4506.
You are taking an inventory of your assets and liabilities. Professionals that can help you gather this information include your financial advisor, accountant, bank manager, and lawyer. Get this done as fast as possible so you can determine who has control of the assets. This step is not fun but necessary. So get it done with or without help now.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.