How to Divide Property
In the bittersweet song “Like a River,” Carly Simon sings about dividing the railway watches and fighting over the pearls with her sisters after her mother passed away. Simon’s lyrics speak about the issues that come up when families, friends and married couples try to divide property during a divorce or after the death of a loved one.
How to Divide the Property of a Deceased Parent or Relative
Within a family, one of the best ways to divide items that have real or sentimental value is to simply talk beforehand with the parent or relative to make sure that their wishes are carried out. During these discussions, it’s important to ensure all interested parties (i.e. brothers and sisters) are present to prevent any legal questions or concerns down the road.
If the parent or relative doesn’t currently have a will, encourage them to speak to a lawyer or use estate planning software, such as Quicken’s WillMaker Plus. Having everything down on paper can prevent a multitude of legal headaches.
How to Divide Property During a Divorce or Breakup
One of the most insightful resources about relationships is “When Harry Met Sally,” a romantic comedy that contains a very telling scene about how to divide property. Harry, played by Billy Crystal, warns his friend Jess (Bruno Kirby) that if he breaks up with his live-in girlfriend, they eventually will end up arguing over an unusual wagon-wheel coffee table that Jess had in his apartment.
Cohabitation: On his Web site, attorney William J. Freeman mentions viable options for people who are cohabitating, such as a Joint Ownership Agreement, a legal document that shows that both inhabitants own a piece of the property. Another useful document is a Cohabitation Agreement, which outlines how property will be divided if the relationship ends.
Divorce: Divorce adds a whole new dimension to dividing property. Rather than leaving it up to attorneys or a judge, Judge Roderic Duncan on Nolo.com recommends that spouses sit down together and create a list of all the personal property, assigning a fair value and a logical owner.
Judge Duncan also stresses the importance of being open and honest when dividing property. Hidden bank accounts and other assets can be harmful if they come to light later on in the divorce proceedings. The laws regarding joint property differ from state to state, so it’s always important to consult with a lawyer in either case.
Calculating the Fair Value of Property
Stocks, bonds and other negotiable securities: Consult a financial advisor to determine the fair market value of negotiable securities and what kind of tax consequences will be incurred when the securities are sold.
Collectibles: Coins, comic books and other collectibles typically have real negotiable value, so it’s good to seek out an expert opinion at places like coin and collectible shops. The owners can determine the worth of an item, recommend a good standard price guide and possibly purchase the item for a fair amount.
Vehicles: If a car or truck is involved in a divorce settlement, consult an online resource such as the Kelley Blue Book to determine the fair market value.
Real Estate: The easiest and fairest way to determine the value of a house or other piece of real estate is to have the property appraised. One party in the divorce may want to buy out the other’s interest in a piece of property, so it’s important to get an accurate estimate of what the property is worth.
Miscellaneous Times When You Have to Divide Property
Investment Clubs: Over the last few years, investment clubs have increased in popularity. It’s important, though, to make sure a club charter has provisions on how to divide property, which, in this case, means stock certificates and profits.
Lottery Tickets: When the Powerball Jackpot reaches the hundreds of millions, coworkers are ready to pool their money on a batch of tickets. These office pools sometimes pay off, either in the big jackpot or a smaller amount such as $100,000, so it’s important to get something down on paper on how the winnings should be divided.
Keeping Things Civil When Dividing Property
When dividing property during a divorce or other life-changing event, it’s important to keep an open mind and not let emotions enter the equation. Dividing property is all about dollars and cents. It’s important to remain calm when negotiating with a spouse or significant other in order to walk away with a fair and equitable settlement no matter what.
If possible, discuss things in a setting that’s comfortable for everyone. If these discussions get heated, consider bringing in an objective third party such as a negotiator or mediator to help keep things civil.
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