How to Liquidate Before a Divorce

A summer house, like the one pictured, might have to be liquidated before a divorce takes place.

One of the first things you need to do before a divorce is to liquidate. Liquidation helps you remove property and assets from the division table during the divorce. This may be done mutually as to joint property and assets with your spouse or toward personal assets you have that you do not want to be part of the divorce process. The liquidation process helps remove any complicated divisional proceedings from the divorce. A common practice is to split the profits from the liquidation between each spouse evenly to ensure a fair distribution of wealth.

Instructions

1. Discuss with your spouse about certain assets and property that may be difficult to process in court. These pieces of property may be difficult to split up or manage during the divorce hearings. This may include your house, stocks or banking accounts.

2. Calculate the value of your assets or property to make sure you and your spouse will not lose any money from the liquidation process.

3. Communicate with your lawyer about your spousal discussion. Your lawyer will be able to discuss, in legal language, with your spouse's lawyer on the liquidation process and specific deals from the process.

4. Draft a liquidation contract that details the specific liquidation process between you and your spouse. This must be agreed upon by both parties.

5. Hire an auctioneer. An auctioneer is a third party representative who will sell the asset or property, usually at auction. An auctioneer takes a small part of the profits from the liquidation.

6. Sell property directly on the market if you do not utilize an auctioneer.

7. Accumulate all profits from the sales into a bank account set up specifically for liquidation profits.

8. Have your lawyers preview the liquidation funds and have them determine if all parts of the contract are met. If they are not met, you might have to appear in court over specific issues.

9. Divide the liquidation profits evenly or according to the terms set up between each legal party.

10. Begin your divorce process. Now that certain assets and properties are liquidated, the divorce process can begin and hopefully be a smoother experience than it would have been before liquidation.

Tips & Warnings

• Liquidation can begin during your divorce proceedings. However, by completing liquidation before any divorce proceedings occur, you and your spouse will no longer have to deal with certain properties during the divorce process.

• Liquidation involves giving up property or assets. You are given profits from liquidation, but you must understand that your assets and property are now no longer your possessions.

References

• Divorce Room: How to liquidate assets during a divorce?
• Financial Web: Divorce: Dividing Assets Quickly and Painlessly