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The significance of "assets" in divorce

Divorce is always more complicated than couples expect, especially when you start hearing legal terms such as property division, equitable distribution or parental rights. However, there is one legal term that most couples do not deeply analyze - the word "asset."

In most situations, asset means property owned by a person or company and is associated with having value or use. However, in a divorce context, asset takes on a more significant meaning because everything a couple "owns" may not be considered an asset in the eyes of the court, and even if it is, it may not be considered a marital asset and subject to division.

What classifies as an asset during a divorce?

People often think of stock holdings as assets, and they certainly could be assets. However, some stock-related holdings, such as stock options and restricted stock units, require that future events must occur for the holder to truly own them. Some stock options, restricted stock units and similar items may not truly be assets from the court's perspective.

If the stock holding is an asset, it may or may not be a marital asset and subject to division. It could be separate property or a combination of both marital and separate property. Under certain conditions, assets owned prior to marriage will be considered separate property and not subject to division during divorce. However, if separate property increased in value during the marriage, which is common when stocks are involved, that portion may be considered a marital asset and subject to division.

A large aspect of property division is determining what items are assets, and then characterizing them as marital or separate assets. It's an incredibly technical process due to the specific considerations and rules that the court follows throughout divorce proceedings. As you go through your divorce, you should work with a legal expert who could review your situation and guide you through the process.

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