• ktidwell

Dividing Assets During a Recession

If you told someone in February that the price of oil would be less than a dollar in a few weeks, they wouldn’t have believed you. Same with the government sending out checks, the possibility of negative interest rates, and toilet paper shortages. Things that had value yesterday, like your side job driving for Uber, are suddenly worthless - while the gym equipment gathering dust in the garage is worth more used than you paid new.

If you are going through a divorce, understanding the value of your assets has never been more important, or more difficult.


A couple’s house is many times their largest asset. The value of which could easily drop as much as 20% over the next 12 months complicating divorce matters further. The fact that real estate prices have not yet plummeted might give the impression it will hold steady - but it is likely that the housing market will feel major impact from the current economic uncertainty. Credit is already getting more difficult to access and job losses are taking some potential buyers out of the market completely. Others are now frozen in place with fear until more signs of both economic and political stability come to light.

The same is true for rental property. Although some rental properties are always needed, since people will always need a place to live, it doesn’t mean you won’t have to lower the rent to the extent your cash flow-positive investment property becomes an expense.


Not exactly an asset by definition, but should be considered as such in many ways. Assume the worst. Think ahead - if you or your former spouse loses their employment, how would you have planned your divorce differently? What if you both lose your jobs? The answers to these questions may or may not affect how you plan today, but they need to be explored.

There’s also a significant possibility that the benefits you were enjoying may be cut back - way back as businesses look for additional ways to cut costs. This could come in the form of higher deductible health insurance plans, less paid for gym memberships and tighter expense accounts.

Personal Property

Your personal treasures that you saved every penny up to buy are now worth only a fraction of what you paid. Be aware the court doesn’t look at the replacement value, but the actual value of the item. Depending on the asset, items like used furniture are often only garage sales prices. In terms of electronics, they often have almost no value a few years after purchase.


Unless you can predict the future, or just got lucky, the value of your retirement fund recently took a hit. Don’t assume the economy is going to bounce back right away, or that your fund manager will know what to buy and when. How would you plan your divorce differently if your retirement fund was worth only half of what you were counting on?

The examples above are certainly a worst-case-scenario, but the best divorce planning means looking at your life and finances from all possible angles. Determining the value of an asset at this moment in time is a bit of a moving target, but can be done with the help of an experienced divorce and wealth planning professional. It also may be time to look at ways to keep your litigation costs down. Let us know how we can help.